Tesla and EV sales dropped in Canada as much as 70% due to price hikes and loss of rebates

Tesla saw a big drop in sales across Canada in January, but it is not because of a wave of anti-Elon Musk sentiment. Instead, the drop is actually to do with the loss of rebates at both the federal and provincial levels, and recent price hikes. As a result, it wasn’t just Tesla that saw its sales drop, with other automakers also seeing large double-digit declines. While official numbers have not been released yet, preliminary sales data from S&P Global and shared with the Toronto Star show that Tesla sales in Canada dropped by 70% from December 2024 to January 2025, mirroring a drop of 79% for the broader electric vehicle (EV) and plug-in hybrid (PHEV) sales. Other automakers suffered similar drops. S&P says Chevrolet EV sales dropped by 65%, while Hyundai saw a 30% drop month-over-month. For Tesla, these drops can be attributed to a perfect storm of issues – the sudden and indefinite pause of the federal iZEV rebate program, which also impacted all automakers, and the series of price hikes in January. Those price hikes also meant the end of some provincial rebates, putting the effective price hike for some Tesla models as much as $21,000 for those in Quebec and $18,000 in British Columbia, the two leading provinces for EV adoption in Canada. Associate Director of Marketing Reporting James Hearn had this to say on the drop in EV sales: “Consumers in Canada are price sensitive and with these changes to the federal and provincial rebates, its negatively impacting what vehicles customers are looking to buy.” (via The Star) Although month-over-month EV sales growth did drop in January 2025 compared to December 2024, year-over-year growth is still on the uptick. Per the S&P Global numbers, overall EV sales are up 30% in Canada when you compare January 2024 and January 2025. February most likely will see the downward month-over-month trend continue as the increased uncertainty around the iZEV program will lead potential buyers to reconsider their options. However, Polestar, GM, and Nissan have already responded to the cut and are offering $5,000 in incentives to counter the iZEV loss. There is some hope as the Liberal leadership race is nearing an end, and we should start to see the federal platforms released to give some further clarity on a revamped or funded iZEV program. The NDP has already come out with some initial ideas including tariffs on Tesla and a $10,000 made-in-Canada EV rebate.