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EVs hit their first speed bump in 2025
Summary
After years of growth, electric vehicle market share among franchised dealers in Canada fell in 2025. The federal government has announced a new auto strategy with rebates, tougher emissions rules and funding for charging, but the plan is light on details.
Content
Canada's move toward electric vehicles has been central to federal and provincial climate plans because transportation makes up about a quarter of the country's emissions. After years of steady growth, 2025 was the first year in which EVs lost notable market share in Canada. Governments, automakers and many consumers are encountering a more complicated transition than expected. The federal government announced a new auto strategy this month that includes tougher tailpipe standards, tax measures, duty relief, a $5,000 EV rebate program and funds for charging infrastructure, but key details remain to be spelled out.
Key facts:
- J.D. Power reported that among franchised auto dealers in Canada (excluding direct-to-consumer brands) EV market share fell to about 5% in 2025 from 6.8% in 2024; plug-in hybrids fell to 3% from 3.9%, while regular hybrid sales rose to 14% from 10.5%.
- DesRosiers Automotive Consultants reported that Tesla's sales in Canada fell by more than 60%, and noted Canadian counter-tariffs and other causes as contributing factors.
- Analysts and industry observers point to several factors behind the 2025 decline, including the temporary end of some federal and provincial rebates, tariffs, affordability pressures, uneven model availability, and limited public fast-charging infrastructure.
- Outcomes varied by segment and model: some luxury and new-model launches saw gains while other models and segments recorded sharp declines.
Summary:
The 2025 decline highlights that the transition to electric vehicles is uneven and still maturing, shaped by policy changes, trade measures and market shifts. The federal auto strategy is presented as a starting point, but its effectiveness will depend on implementation details. Undetermined at this time.
