young father with daughter in his arms charging an electric car
New data is showing Canadians are turning to electric vehicles (EVs) as they become more affordable, potentially due to government incentives and rising gas prices.
Statistics Canada’s most recent report (1) on motor vehicle sales showed that EV sales jumped nearly 75% year-over-year in March, with 21,574 sold. EV sales have been incrementally climbing since the beginning of 2026 with 8,826 sold in January (2) and 12,626 in February (3). While EV sales in April slipped to 17,795 (4), the first four months of 2026 have seen an increase of about 21% compared to the same timeframe in 2025.
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In January of 2025 (5), the government cancelled its rebate incentive for consumers and businesses, which significantly slowed down sales for the rest of the year. Charles Bernard, chief economist for the Canadian Automobile Dealers Association, told CBC News (6) that these incentives have made EVs more affordable, driving additional sales compared to previous years.
In February of 2026, the Liberal government announced its Electric Vehicle Affordability Program (EVAP) (7), offering up to $5,000 off a fully electric vehicle and $2,500 off a hybrid model.
According to Bernard, this program has made EV prices more comparable to standard gas-powered options, prompting more widespread adoption.
Government benefits and gas prices boosting EV interest
With these incentives available to Canadian consumers, the EV market seems to have a new tailwind in place. According to the JD Power 2026 Canada Electric Vehicle Consideration (EVC) Study (8), 25% of consumers seeking a new vehicle have reported government incentives boosting their likelihood of buying an EV.
To qualify for the benefit, the EV leased or purchased must be made in Canada or in countries that have free-trade agreements with Canada. The incentives also only apply to vehicles with a purchase value of $50,000 or less — unless they are made in Canada, in which case no transaction value cap applies.
The EVAP is only in place until 2030, and the maximum rebates of $5,000 and $2,500 are only available for this year. With each passing year, the respective rebates will decrease.
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However, another more existential market shift causing renewed interest in EVs appears to be stubbornly high gas prices. Since the war in Iran began in late February (9), causing major supply chain disruptions of crude oil with the Strait of Hormuz no longer a reliable passageway, gas prices have surged (10).
As of the week of June 29, the average price of fuel across Canada stood at
$161.1/L, up from $134.0/L a year ago, says the Canadian Automotive Association (11). And retailers on the ground are seeing the effects in real-time.
“People come in, you know, claiming … gas prices as the reason why they’re trying to get out of their big Dodge Ram diesel truck that costs them a thousand bucks a month on gas,” Max Maurice, an Ontario-based Shift Electric Vehicles sales manager, told CBC News.
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Practical barriers still persist for prospective EV buyers
While government rebates and higher fuel costs are drawing more Canadians toward EVs, practical concerns remain.
JD Power’s EVC survey found that of the respondents who reported they were “very unlikely” or “somewhat unlikely” to purchase an EV, 65% were concerned with the driving distance per charge. The second most pressing concern was lack of charging stations (56%), followed by inadequate performance in extreme temperatures (54%).
These considerations seem to be especially felt in more remote locations in the country. Both Yukon and the Northwest Territories saw a drop in EV registrations (12) in the first quarter of this year — NWT registrations fell to 1.0% from 1.2%, while Yukon registrations fell from 7.5% to 6.5%. Meanwhile, Nunavut has not reported a single EV registration for the first three months of 2026.
How to purchase an EV the right way
Though EVs are becoming a more attractive and potentially prudent purchase thanks to government incentives and fuel prices, that does not mean they can be purchased with no strategy in mind. Before you buy an EV in 2026, remember these tips to help you make the best decision.
Compare your insurance options. Coverage for electric vehicles isn’t cheap according to a recent report from Sussex Insurance (13) that reveals EVs cost 36.8% more to insure than internal combustion engine vehicles. It’s been documented that insurance for EVs can vary widely across similar models (14) as well. To counter the gap in premiums across insurers and similar models, make sure to get at least three different quotes before you make a purchase. And look into bundling your EV insurance with other policies for a discount.
Make sure you are eligible for incentives. Per the federal government’s rules, consumers can receive incentives only if they purchase an EV with a final transaction value (15) of $50,000 or less (which does not apply if the vehicle is Canadian made) from an authorized dealership/seller. Here is a list of eligible vehicles (16) to help you parse out which makes/models qualify given their price. However, the federal government is clear that just because a vehicle is on or off their list does not mean it is eligible for a rebate. It’s also worth noting that EVAP rebates only apply to new EVs, not pre-owned models.
Remember how the application process works. While the incentive is for the person purchasing the EV, there isn’t a formal application process from the buyer. Instead, the buyer fills out additional paperwork provided by the dealership, who then sends it to Transport Canada to be verified. Once the buyer and vehicle are confirmed to be eligible, the authorized dealership or seller applies the rebate amount directly to the bill of sale or lease agreement, after taxes and fees are added.
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Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.
Statistics Canada (1), (2), (3), (4); Electric Autonomy (5), (12); CBC.ca (6), (7), (10); J.D. Power (8); International Crisis Group (9); Canadian Automobile Association (11); Surex (13); Insurance Institute of Canada (14); Transport Canada (15), (16)
This article originally appeared on Money.ca under the title: Buying an EV in Canada is more attractive thanks to new incentives and soaring gas prices — will you make the switch?
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.