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iZEV Incentives Program Expanded to Include More – and More Expensive – Zero-Emission Vehicles

Starting Monday, EVs with a base price of $55,000 will be eligible for the discount Automotive columnist: , Updated:

It was expected and the news came this Friday: The Canadian government announced adjustments to its iZEV incentives program for electric vehicles, and chief among them is the raising of the price ceiling that qualifies new EVs for a discount.

The result is that more electric vehicles will be eligible for discounts under the program - though this is conditional on something that is out of the government's control. We'll come back to that.

The discount amount remains $5,000, by the way.

From $45,000 to $55,000
During the announcement, Transportation Minister Omar Alghabra confirmed that as of next Monday, April 25th, electric vehicles with a base price of $55,000, and priced at a maximum cost of $65,000 with options, will be eligible for the discount.

That’s up from the current $45,000 and $55,000 limits.

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Higher price ceiling for Electric SUVs, Pickups
Larger zero-emissions vehicles (wagons, SUVs, pickup trucks, minivans and vans) now can be eligible for the discount with a higher threshold. That is set at $60,000 for the base price and $70,000 for the highest-priced trims.

Another change is that plug-in hybrid models, previously eligible for a $2,500 discount based on the capacity of their battery pack, will be eligible for the $5,000 discount as well, but on condition that the electric range they deliver is greater than 50 km. Otherwise, the discount drops back to $2,500.

Since 2019, some 141,000 buyers of electric vehicles have been able to take advantage of the iZEV program incentive, according to the federal government. In 2021, one in 20 new models sold was either electric or plug-in hybrid. The government's goals are to increase that ratio to one in five by 2026.

Price increases to come?
Expansion of the iZEV program is certainly good news for consumers looking to buy an electric vehicle, but one X factor remains how manufacturers will react to the changes. Right now, many automakers are offering their electric models at just under the current $45,000 threshold, obviously to make them eligible for the incentive.

By raising the thresholds, the government is ensuring more EVs are eligible, but we can expect to see the price of some models currently sold under $45,000 rise significantly over the next few years.

The result could be that consumers will have more options of incentive-eligible vehicles to choose from, but they will pay more for them.

And what that might do to EV sales is anyone’s guess. Will it sabotage the government’s stated goals for reaching EV sales targets? Stay tuned.