Canada’s auto market showed signs of slowing in February, but while overall vehicle sales dipped slightly year-over-year, zero-emission vehicles (ZEVs) surged, driven by the return of federal purchase incentives.
According to the report released on Thursday by Transport Canada, 124,004 new vehicles were bought in February 2026, a modest 0.9% decline compared to the same month last year. Passenger car sales saw the sharpest drop, falling 3.8%, while truck sales edged down just 0.5%.
It is a different story however when it comes to zero-emission vehicles (ZEVs), which saw 12,626 new sales in February. That is a 47.2% increase from February 2025, and an equally impressive 45.6% increase from the month prior.
As a result, ZEVs accounted for 10.2% of all new vehicle sales, up significantly from 6.9% a year earlier. The ZEV category includes both battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs), which together are steadily capturing a larger share of the Canadian market.
The likely driver behind the surge in sales is the reintroduction of federal incentives through the Electric Vehicle Affordability Program (EVAP). Launched on February 16, the program offers rebates of up to $5,000 for battery electric vehicles and up to $2,500 for plug-in hybrids.
While the program was only in effect for part of the month, its impact was immediate. The low January sales (8,672) suggests buyers may have been waiting for incentives to return. With EVAP now in place through 2031, albeit with gradually declining incentive amounts, it could provide a more stable foundation for long-term ZEV adoption in Canada.
With the incentive available for the full months of March and now into April, and with fuel prices continuing to climb, ZEV sales could see even stronger gains in the coming data.
While it is encouraging to see the increase in sales, the total volume is still well off the all-time high. In September 2024, a total of 30,318 ZEVs were sold in Canada.
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