Canada’s transition to zero-emission vehicles (ZEVs) accelerated in 2024, with new data revealing that ZEVs accounted for 15.4% of all new light-duty vehicle registrations, a significant jump from 10.7% in 2023.
This surge, representing a 44.2% increase in volume, highlights a strong nationwide push towards cleaner transportation. However, while the momentum is high, shifting incentive structures and market dynamics suggest the ZEV market will face challenges in 2025.
Quebec Leads the Charge
According to newly released data from S&P Global Mobility, Quebec continues to dominate Canada’s EV adoption, registering the highest ZEV adoption rate at 32.9%. The province also accounts for an overwhelming 54% of all ZEV registrations in the country, thanks to substantial incentives and expanding charging infrastructure. In the final quarter of 2024, Quebec’s ZEV adoption hit an astonishing 42%, with the province contributing 60% of all ZEV sales in the country.
However, that year-end push was likely due to the province’s incentive structure that changed at the start of 2025, first with a pause of the program, then a reduction of the maximum rebate from C$7,000 to C$4,000 as of April 1. Early data suggests that this policy shift is already impacting demand, with a 65% drop in BEV registrations reported in January 2025 compared to December 2024.
National Trends: Growing but Uneven
While Quebec is leading the charge, other provinces are making strides at different paces. British Columbia, traditionally a leader in ZEV adoption, reported an adoption rate of 22.5% in Q4 2024, slightly down from 24.9% in Q3. Ontario, Canada’s most populous province, saw its ZEV adoption rise to 9.6% in Q4, up from 9.0% in Q3. Meanwhile, smaller provinces like New Brunswick (8.3% in Q4, up from 7.5% in Q3) and Manitoba (6.8% in Q4, up from 4.4% in 2023) demonstrated impressive growth.
Battery Electric Vehicles (BEVs) on the Rise
Among the various types of ZEVs, BEVs have experienced the most growth, now accounting for 11.4% of all light-duty vehicle registrations, a 41.8% increase over the previous year. Plug-in hybrid electric vehicles (PHEVs) and fuel cell electric vehicles (FCEVs) contribute to the overall ZEV tally, but BEVs are driving the transition.
Impact of Incentives on Adoption Trends
Government incentives have played a crucial role in ZEV adoption across Canada. The federal iZEV program, which offered up to $5,000 in rebates for eligible EVs, has been instrumental in lowering the cost barrier for consumers. However, the iZEV program has been paused indefinitely after running out of funds, unlikely to return.
Provincial incentives, particularly in Quebec and British Columbia, have further supported demand. However, as seen in Quebec, reductions in these incentives can lead to immediate market reactions. British Columbia is also experiencing a slowdown in its ZEV growth rate, reporting only a 2.2% increase in ZEV registrations in Q4 2024, lagging behind the broader industry’s 2.6% growth rate.
Regional Highlights: Metro Areas Driving Adoption
Major urban centers remain at the forefront of ZEV adoption. Montreal saw its ZEV adoption rate climb from 23.4% in 2023 to 36.0% in 2024, a remarkable 43.1% increase. Toronto’s ZEV adoption, while improving, remains relatively modest at 10.1%, reflecting slower infrastructure expansion and consumer hesitancy. Vancouver, historically a leader, reported a slight dip in penetration from 27.8% in 2023 to 27.0% in 2024, signaling a potential plateau.
Outlook for 2025 and Beyond
Looking ahead, incentive changes, both at the federal and provincial levels, will undoubtedly impact adoption rates in 2025. The steep decline in ZEV registrations in the early part of the year suggests that without strong policy intervention, the rapid growth seen in 2024 may not be sustained.
As Canada inches closer to its 2035 goal of 100% ZEV sales, the country’s push towards a zero-emission future remains on track, but maintaining momentum will require a balanced approach—one that includes sustained government support, infrastructure expansion, and incentives tailored to evolving market needs.
