Overall, the Canadian auto market performed strongly in the second quarter of 2025, but not so the pluggable electric vehicle segments. Registrations of zero-emission vehicles (ZEVs) fell by 29.5 percent year-over-year in Q2 2025, with market share dropping sharply to 8.6 percent% (compared to 18.3 percent in Q4 2024).
More specifically, sales of 100-percent electric vehicles (BEVs) plunged by 39.2 percent, with plug-in hybrids (PHEVs) dropping as well but by only 2.2 percent.
Absolute volumes and overall market dynamics
In absolute numbers, some 37,000 ZEVs were registered in the second quarter of 2025, compared to more than 48,000 a year earlier. In June, sales stood at 14,000 units, a 35-percent collapse compared to 2024.
Even more striking is that the drop comes as the overall Canadian new vehicle market grew by more than 6 percent during the same period, with around 177,000 registrations. This contrast illustrates how the ZEV trend is diverging from the general dynamic in the retail auto sector.
By province: Where are the biggest drops?
The decline is most significant in Quebec (–38.1 percent) and British Columbia (–27.6 percent). Ontario (–18.6 percent) also saw a drop, as did Prince Edward Island (–30.6 percent). Conversely, New Brunswick stands out with a slight increase (+1.6 percent).
The particular weight of Quebec
Despite the drastic drop, Quebec retains its leading position: more than half of the country's ZEV registrations are made there.
Current context of incentives
- • Federal (iZEV): Program on pause since January 2025.
- • B.C. (Go Electric): Currently temporarily suspended.
- • Quebec (Roulez vert): Interrupted in February–March 2025, then resumed in April with reduced amounts.
Why the sales decline? Three main explanations
- - Less-generous or suspended incentives - The combination of the federal pause and provincial adjustments removed a key price lever, particularly for entry- and mid-range BEVs.
- - Still restrictive financial conditions - The policy interest rate remains at 2.75 percent. This is lower than in 2023–2024, but credit remains expensive and that weighs on vehicles that are already expensive to buy.
- - Uneven progress in the charging network - Public charging infrastructure has grown by nearly 25 percent in one year, but coverage remains insufficient outside of major centres.
EV owners there to stay
Despite the frustrations related to charging, the majority of EV owners are in it to stay: nearly 9 out of 10 plan to get another electric model for their next purchase or lease. The slowdown is thus mainly attributable to skittish first-time buyers remaining on the sidelines due to the issues raised above.
Which models lead the market?
In 2023, the all-electric vehicle sales podium was occupied by the Tesla Model Y (nearly 35,000 units), the Tesla Model 3 (over 19,000), and the Chevrolet Bolt EUV (about 11,000). Hyundai's Ioniq 5 has sold particularly well in Quebec. On the plug-in hybrid side, the Mitsubishi Outlander PHEV and the Toyota RAV4 Prime were among the most popular. Since then, the Chevrolet Equinox EV, notably, has done very well in Canada. These mainstream models show the importance of incentives in supporting sales volumes.
What to watch for in 2026
• ZEV Policies: Ottawa has announced a loosening of the sales target for 2026, with the 20-percent target no longer being mandatory for manufacturers.
• Incentives: The future of the federal iZEV program and provincial programs will be decisive.
• Price and Availability: The falling cost of batteries and international competitive pressure could quickly bring down the retail prices of EVs.
• International Context: While more than 20 percent of new cars sold worldwide in 2024 were electric, Canada risks falling behind if the current trend continues.
The final word
Q2 2025 confirms a speed bump for ZEVs in Canada, mainly linked to disappearing incentives and a still-tight financial context. However, the high level of satisfaction among owners and the gradual expansion of the charging network indicate that the transition is not being called into question. The year 2026 will be decisive, with a balance to be found between public policies, financial incentives and competitive retail prices.