Electric vehicle sales have dropped 44 percent since last year, even as the overall new vehicle market grows, according to Statistics Canada’s latest vehicle sales update.
In March 2024, 22,390 new zero-emission vehicles (ZEVs) were sold in Canada, including battery electric and plug-in hybrid models. This year, however, the sales for March dropped to 12,347 ZEVs, StatCan determined through its monthly new motor vehicle sales survey.
Overall, the total number of all types of new vehicles purchased in March was 189,259, reflecting a 9.4 percent increase from sales of March last year. The federal agency says the increase is largely due to a boost in sales of new light trucks, which gained 13.5 percent from last year.
Sales of new passenger cars declined 10.9 percent from the previous year. The largest decrease in new automobile sales was for electric vehicles (EVs), which made up 6.5 percent of the total vehicles sold in March this year.
StatCan’s survey did not mention what led to the decline of EV sales. Data from the federal agency, however, indicated that sales have been plummeting since the federal government in January this year paused its incentive program, which lowered the price on an EV by thousands of dollars.
Transport Canada introduced the Incentives for Zero-Emission Vehicles (iZEV) Program in 2019 to make new electric vehicles more affordable for Canadians by providing rebates of up to $5,000 to individuals purchasing or leasing ZEVs.
The federal government paused the program on Jan. 12, more than two months earlier than it was scheduled to end, as the program’s allocated funds were fully exhausted, Statistics Canada said in an updated question and answer form regarding the program’s pause.
Mandatory Targets
Since the termination of Transport Canada’s incentive program, automakers in Canada have been calling for an end to electric vehicle sales mandates imposed by the federal government.Canada’s 2030 Emissions Reduction Plan, introduced by former Prime Minister Justin Trudeau in 2022, set mandatory targets for new vehicle sales.
The interim target set for 2026 is for ZEVs to represent at least 20 percent of all new light-duty vehicle sales. The goal by 2030 is 60 percent, and ultimately 100 percent by 2035.
Automakers have pushed back against the mandates on ZEV sales since they were first announced, saying sales targets cannot be achieved unless affordability and vehicle charging concerns are addressed.
The Canadian Automobile Association (CAA) conducted a study earlier this year to address Canadians’ concerns related to owning EVs and their reliability when driving in cold winter conditions. Issues with battery range in cold weather was a top concern for more than two-thirds of electric vehicle owners polled in a 2024 CAA survey.
“In CAA’s recent survey of EV owners, 4 in 10 EV drivers said significant slower charging in extreme cold weather is a problem,” the study said. “And more than half (53 percent) of EV drivers still prefer to take their gas vehicle on long trips in extremely cold weather.”
Ontario EV Projects Delayed
A drop in sales has also led to some auto manufacturers slowing down their EV investments. Honda Canada will be delaying a $15 billion investment project for electric vehicle production in Ontario, the company announced in a press conference on May 13.“Looking ahead, the growth of the electric vehicle market has slowed more than initially expected, making it difficult to anticipate further progress,” said Honda CEO Toshihiro Mibe. “Therefore, we have decided to postpone large-scale investments in Canada.”
Honda’s electric vehicle project includes a vehicle manufacturing plant and a battery manufacturing facility in Alliston, Ont. Despite the company’s move to delay the project, Industry Minister Mélanie Joly says Honda Canada’s CEO assured her that no Canadian jobs will be lost or modified and that the company is still committed to major EV investments in Canada.
Last month, GM Canada paused production at an EV plant in Ingersoll, Ont., due to low demand for its EV offerings, including electric delivery vans and batteries for passenger vehicles, leading to the indefinite layoff of around 500 employees.
“This adjustment is directly related to responding to market demand and re-balancing inventory,” the company told The Epoch Times in an email.
Chandra Philip, Jennifer Cowan, and Matthew Horwood contributed to this report.
