The issue appears directly linked to the lack of “green” rebates for them
- EV and PHEV adoption rates fell by nearly 1/3 in Canada in January 2025
- “Paused” rebates federally and in Quebec seem to be to blame
- Tesla, Chevrolet, and Hyundai EVs had the largest declines
The rate of adoption of zero-emission vehicles (ZEV) in Canada, which includes electric-only, plug-in hybrids (PHEVs), and much-rarer hydrogen fuel-cell vehicles (FCEV), fell by nearly a third in January when compared to December, and it appears due to lack of “green” rebates on them.
That’s according to data analytics firm S&P Global Mobility, as reported by Automotive News Canada and other sources. S&P said the ZEV penetration rate in Canada – the percentage of those vehicles among total vehicle sales – was 15.4% throughout all of 2024, and 18.9% in the fourth quarter. Both of those numbers were up 40% year-over-year from 2023. But January 2025’s penetration rate of ZEVs across Canada was just 13.3%, and that marked a fall of 29.6% from what it had been in December 2024.
Quebec drivers had been the strongest supporters of ZEV vehicles, and in 2024, they accounted for 54% of the country’s total ZEV sales for the year, and 59.8% of all sales in the fourth quarter of 2024. Instead, in January 2025, the province’s take rate dropped to just 21%. Among all vehicles sold in Quebec in 2024, 32.9% of them were ZEVs, and that rose to 42% in the final three months of that year.
That last-quarter boost was undoubtedly due to Quebec’s decision to scale back its generous rebates on “green” vehicles. In 2024, buyers could collect up to $7,000 on a new EV; up to $3,500 on a used EV; and up to $5,000 on a new PHEV. On January 1, that dropped to $4,000 on new EVs, and $2,000 on used EVs and PHEVs. That will drop again at the start of 2026, to $2,000 for new, $500 for used, and $1,000 for PHEVs, and then disappear entirely once the calendar rolls over to 2027.
Mind you, that’s what that provincial government intended to do, at least until February 1, 2025 rolled around and it placed a temporary pause of all those rebates until March 31, 2025. The official word was because of “a high number of applications received” by the program “in recent months.” The announcement for that pause came in mid-December, which could explain the bump in sales that month as buyers rushed to get the higher rebate or, for that matter, any rebate at all.
So far, the Canadian government hasn’t made any announcements of reviewing its planned ZEV mandate. That requires ZEVs to account for 20% of all new-vehicle sales in the country by 2026; to 60% by 2030; and 100% in 2035. The U.S. also has a ZEV mandate that’s actually a bit higher, but its survival is sketchy, given that country’s new administration. And as the S&P story suggests, it seems to be tough to meet minimum ZEV sales when buyers no longer have that financial incentive to go for them.
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