Zero-emissions vehicle sales rise 75% in Canada, experts point to rising gas costs and rebates

Adrian Ghobrial breaks down the factors driving a surging demand for electric vehicles in Canada and what this could mean for the market.

TORONTO -- A new Statistics Canada report has revealed that this past March, 21,574 new zero-emission vehicles (ZEVs) were sold across the country. That’s an eye-opening increase of 74.7 per cent year-over-year when compared to March of 2025.

New ZEVs made up 12.2 per cent of total new motor vehicles sold in Canada, compared with 6.5 per cent in March 2025. Auto industry insiders who spoke to CTV News believe the jolt to the electric vehicle market is being powered by multiple factors.

ZEVs include any motor vehicle that has the potential to produce no tailpipe emissions, such as battery-only vehicles and plug-in hybrids.

Fresh off attending an automotive conference in Halifax this week, Canadian Automobile Dealers Association spokesperson Huw Williams shares that many dealerships believe the surge in sales is a sign of things to come.

“We can see it on the ground (at dealerships) the surge in gas prices and the return of federal (EV) incentives is working to drive the sales. One of the other fundamentals working to drive sales is consumers see their neighbours with EV’s, they’re trusting them more each day,” says Williams.

In February, the Federal Government announced a new, five-year EV incentives program, offering rebates of up to $5,000. The incentives also include hybrid vehicles, which are also in high demand according to those closely watching the industry.

“The majority of Honda and Toyota’s vehicles that are made in Canada are electrified, they reduce tailpipe emissions by 25 per cent to 30 per cent and we know those are in high demand, so is there a future for electrified vehicles in Canada, I mean there’s a future and a present for electrified vehicles,” says Brendan Sweeney, the president of the Pacific Manufacturing Association of Canada.

This latest positive news surrounding ZEV’s comes just Honda indefinitely suspended its $15 billion electric vehicle complex in Ontario. Though across the province in St. Thomas Ont., Volkswagen and PowerCo’s sprawling battery cell gigafactory is nearing completion, with production earmarked for 2027.

Canada has also opened the door to initially allow 49,000 Chinese-built electric vehicles, increasing the number to 70,000 each year by 2030. Demand from budget conscious consumers is expected to drive strong sales.

“We’re also hearing about interesting joint venture projects with Chinese companies coming to North America, we’re also hearing about exciting hybrids in the pipeline and a variety of consumer choice that’s going to be coming from all over the world,” adds Williams.

One roadblock impeding further growth according to those tracking EV trends is the anxiety some consumers have shared over accessible, functioning charging stations close to home and while out on the road.

“We have to focus on reducing the charging anxiety, that means charging stations that work, charging stations that are reliable, and charging stations that are in the places that consumers need them most,” says Williams.

While ZEVS sales gather momentum, over the same period, Statistics Canada reports that the total number of new passenger cars sold fell by 4.3 per cent, with new truck sales slipping as well, declining 6.9 per cent year-over-year in March.