New data from Kelley Blue Book reveals that electric vehicle (EV) prices in North America continue to decline, with the price gap between EVs and internal combustion engine (ICE) vehicles now at its smallest ever. This trend is particularly relevant for Canadian consumers, as it brings EVs closer to affordability for a broader audience.
In March, the average transaction price (ATP) for a new EV reached **$54,508**, marking a **2.8% decrease** year over year. This represents the third consecutive month of declining prices, with a further **0.7% drop** from February. The narrowing price gap between EVs and ICE vehicles now stands at approximately **$5,800**—the smallest margin Kelley Blue Book has ever recorded.
Incentives are significantly driving this affordability trend. In March, the average incentive for a new EV reached **14.6%** of the transaction price, equivalent to nearly **$8,000**. This is more than double the industry average and an increase from **14.2%** in February. A year ago, incentives accounted for **12.9%** of ATP.
Tesla continues to be a major influencer in the EV market. In March, Tesla’s average transaction price was **$53,421**, a **2.6% decrease** compared to March 2025 and **1.2% lower** than February. The company also increased its incentive spending to **12.3%** of ATP.
Despite these price reductions, Tesla's sales performance remains mixed. While Cox Automotive estimates that Tesla’s U.S. sales fell by **8.4%** year over year in March, month-to-month sales show improvement. Tesla deliveries rose by **6.1%** compared to February, marking the second consecutive monthly gain.
For Canadian consumers, this downward trend in EV prices is especially encouraging. Provincial incentives and rebates further enhance affordability. For example, the iZEV (Zero-Emission Vehicle) program offers substantial rebates depending on the province. In Ontario, residents can receive up to **$4,000** for eligible EVs, while British Columbia offers up to **$4,000**, and Quebec provides up to **$7,000**.
Shoppers can find compelling deals even beyond incentives. Some dealers are offering both EV and ICE versions of the Chevy Equinox at around **$27,000**. General Motors is currently pricing these models competitively, making parity between EV and ICE versions a reality.
The decline in EV prices, coupled with rising incentives despite the loss of the federal tax credit, signals a positive shift in the market. The affordability gap with gas cars is finally narrowing, making EVs a more viable option for Canadian drivers.
As you consider your next vehicle, keep an eye on these trends. With provincial rebates and decreasing prices, now might be an excellent time to explore your EV options.