The Canadian electric vehicle (EV) market is experiencing a fascinating shift, mirroring trends seen in the US. New EV sales have taken a hit, while the used EV market is surging — potentially offering some of the best buying opportunities in Canadian EV history.
According to recent data, new EV sales in Canada have decreased significantly. While specific Canadian figures weren't provided, the trend aligns with the 28% year-over-year drop reported in the US market. This decline is directly tied to the expiration of the federal EV tax credit in the US, which had a profound impact on consumer confidence and purchasing behaviour.
In Canada, the iZEV program has been instrumental in boosting EV adoption. However, changes to incentives and rebates at both the federal and provincial levels can influence sales. For instance, some provincial rebates have been adjusted or expired, impacting consumer decisions.
On the flipside, the used EV market in Canada is experiencing robust growth. With more EVs reaching the end of their manufacturer warranties, they are entering the used car market in greater numbers. This increased availability, combined with competitive pricing, is driving demand.
Used EVs in Canada are now priced closer to their internal combustion engine (ICE) counterparts. The average transaction price for a used EV is within a few thousand dollars of a used gas vehicle, making them increasingly attractive to budget-conscious buyers. This price parity is a significant shift from just a few years ago, when the gap was much wider.
Canadian provinces offer various incentives and rebates to encourage EV adoption. For example:
These programs can make a substantial difference in the overall cost of a new or used EV, making them more affordable for Canadian consumers.
Similar to the US, leasing plays a crucial role in the Canadian EV market. Many consumers leased EVs when incentives were more generous, and these vehicles are now returning to the market as used cars. This influx of leased EVs is contributing to the supply and affordability in the used EV segment.
Canadian automakers and dealers are also offering various incentives to move new inventory, including financing deals, extended warranties, and maintenance packages. These incentives can help offset the lack of federal or provincial rebates and make new EVs more appealing.
While battery-electric vehicles (BEVs) face challenges, hybrid electric vehicles (HEVs) and plug-in hybrid electric vehicles (PHEVs) are gaining traction in Canada. The flexibility and fuel efficiency of hybrids appeal to many consumers, particularly those concerned about fuel costs and range anxiety.
Toyota and Honda dominate the hybrid market in Canada, offering a range of models that cater to different needs and budgets. As gas prices fluctuate, the appeal of hybrids and PHEVs is likely to grow, providing a more affordable entry point into the world of electrified vehicles.
The Canadian auto industry is forecasting a cautious outlook for 2026, with total new vehicle sales expected to decline slightly. However, the used EV market is poised for continued growth, driven by competitive pricing, increased supply, and consumer demand.
As more Canadians experience the benefits of driving an EV — such as lower operating costs, reduced maintenance, and fewer emissions — the appeal of electric vehicles will only grow. The current market dynamics present a unique opportunity for consumers to explore EV options, whether new or used, and make informed decisions that align with their needs and values.
In summary, while the new EV market in Canada is facing headwinds, the used EV sector is booming. With the right incentives, rebates, and a growing range of affordable options, Canadian consumers have never had a better chance to embrace electric mobility.