Yahoo Finance Canada's top electric vehicle market to sunset rebates over next few years
Quebec's subsidies of up to $7K will wind down and end in 2027
Rebates of up to $7,000 in Quebec for new electric (EV) and plug-in hybrid (PHEV) vehicles will wind down before ending altogether in 2027 as part of a provincial budget designed to address a record deficit.
The plan comes even as some experts have said significant subsidies will be required for several years to maintain EV sales growth. Quebec — where current subsidies are the highest among Canadian provinces — was the country’s top market for both vehicle types in 2023, with around 57,000 new EVs and 20,000 PHEVs sold, according to Statistics Canada.
The Quebec budget plan, announced Tuesday, cites a “maturing” EV market as a reason for ending the program, noting that in the third quarter of 2023, more than 20 per cent of new vehicles sold in the province were electric.
“Consumers have shown growing interest in these vehicles, which are becoming more appealing to purchase due to market development, technology and the progressive narrowing of the cost gap with gas-powered vehicles,” the budget stated.
Subsidies for new fully electric vehicles will drop from $7,000 to $4,000 at the end of 2024. They will be halved to $2,000 in 2026 and eliminated completely in 2027. The cuts to lower subsidies for PHEVs, used electric vehicles and motorcycles follow a similar pattern.
A $600 rebate for home charging stations will remain intact.
The Quebec program has been in place since 2012. EV and PHEV sales were insignificant in the first years of the program but experienced significant growth in recent years, roughly doubling in 2018 and 2019. From 2022 to 2023, new EV sales grew by two-thirds in the province.
Ottawa has mandated that 100 per cent of new vehicles sold must be zero emission by 2035.
Provinces with EV purchase incentives include British Columbia, New Brunswick, Nova Scotia, Newfoundland and Labrador, Quebec, and Prince Edward Island. Ontario dropped its rebate program in 2018, a move that EY Canada director of energy transition Dan Guatto said caused an “immediate sales hit.”
Guatto told Yahoo Finance Canada in December that incentives were essential, “particularly early on,” but that a quickly evolving market would make them less important.
“I think we’re approaching the point where they’re not really going to matter as much as the cost of owning and operating an EV as people learn that, and the way they fit into our lives.”
