Canada’s Federal EV Rebate Program Has No Money Left, Leaving the Market with an Uncertain Future

Electric cars have been gaining momentum worldwide, and much of their success can be traced to government programs like rebates and tax breaks. Canada had one such program that helped push EV sales for years, but earlier this month, that funding dried up.

The federal Incentives for Zero Emission Vehicles (iZEV) program, launched in 2019, gave buyers up to $5,000 back on new EV purchases or leases. By late 2024, the program had already helped more than 546,000 EVs hit the road.

However, the funds ran out two months ahead of schedule, with no plans for a renewal. This sudden halt has many concerned about meeting Canada’s green targets, including having 20% of new car sales be electric by 2026 and making all new cars electric by 2035.

During the first 11 months of 2024, the iZEV program paid over $927 million toward rebates for 191,000 vehicles. Despite the federal program’s shutdown, some provinces like Quebec still offer incentives, though Quebec’s own rebate program will pause temporarily in early 2025. Whether other provinces follow suit remains uncertain.

Automakers, feeling the pressure, have stepped in with temporary rebates. Mazda, for instance, is offering $2,500 on its CX-70 and CX-90 plug-in hybrids until January 31.

Honda, GM, Hyundai, and others are matching the previous $5,000 federal rebate on specific models for a limited time. However, not all manufacturers, like Toyota and Stellantis, have announced similar plans yet.

Mazda Canada’s CEO, David Klan, criticized the government, saying they had promised to support EV adoption but are now leaving manufacturers to fill the gap. Automakers worry that without continued incentives, hitting those ambitious EV sales goals may be impossible.

Meanwhile, in the United States, federal EV tax credits of up to $7,500 still exist but face uncertainty. There’s talk of potential changes to tax laws that could impact EV incentives south of the border as well.

For now, both buyers and automakers are navigating an uncertain future, with rebates vanishing just as EV adoption needs another big push.

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