Canada's EV rebate program hits record as Tesla dominates claims

Canada’s EV Rebate Program Sees Unprecedented Demand, Tesla Leads

Since its introduction, the popularity of Canada’s federal electric vehicle (EV) incentive program has soared, particularly throughout 2023. Notably, Tesla (TSLA), Elon Musk’s flagship automotive company, has emerged as the predominant beneficiary, claiming about 25% of all discounts filed in 2024, a figure that significantly surpasses its closest competitor, as per Transport Canada data.

Known as the iZEV program, it supports the transition to greener transportation by offering a $5,000 rebate for battery-electric vehicles and plug-in hybrids (PHEVs) with an electric range exceeding 49 kilometers. Lower-range PHEVs can avail of a $2,500 discount. To be considered for the maximum rebate, the purchase price for passenger vehicles should not exceed $55,000, which increases to $65,000 for SUVs, minivans, and pickups.

In April 2024 alone, the program received 19,162 claims, marking an increase of 157% compared to the previous year and setting a new record since the initiative launched in May 2019. This spike indicates a growing interest and acceptance among Canadians to adopt more environmentally friendly vehicles.

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However, the rise in claims contrasts with a slight decrease in the percentage of zero-emission vehicles, which accounted for 11.3% of the overall light vehicle registrations in Q1 2024, down from 12.3% in Q3 2023, based on a report by Statistics Canada.

The most active participants of the incentive program have been residents of Quebec, having submitted over half of the 60,000 claims processed in 2024. Ontario and British Columbia claim a sizeable share as well, with about 12,000 filings each.

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Despite the increasing popularity of the iZEV program, challenges such as elevated household expenses and higher borrowing costs might be inhibiting a swifter shift from combustion engine vehicles, as highlighted by J.D. Ney, director of the automotive practice at J.D. Power Canada, in a discussion with Yahoo Finance Canada. Ney also pointed out that Canadian consumers generally show a preference for more expensive vehicles offering longer range and four-wheel drive, options that often exceed the price cap for rebate eligibility.

As the automotive landscape continues to evolve, it appears that the types of EVs most desired by Canadians fall into the chiefly expensive category, reflecting a broader pattern of consumer behavior aligned with high-range, robust features.

For continued updates, follow Jeff Lagerquist, senior reporter at Yahoo Finance Canada on Twitter @jefflagerquist.