Canada’s electric vehicle (EV) market experienced a notable shift in the second quarter of 2025, with full hybrid vehicles surpassing zero-emission vehicles (ZEVs) in consumer preference for the first time. Full hybrids captured 12.9% of new vehicle registrations, while ZEVs, including battery electric vehicles (BEVs) and plug-in hybrids (PHEVs), accounted for 9.2%, down from 9.7% in Q1 2025, according to S&P Global.
Despite a 25.6% increase in ZEV volume, the overall light-duty vehicle market expanded faster, growing 32.3%, which diluted ZEV market share. BEVs represented 5.9% of registrations, showing volume growth of 13.3% but a decline in market share. Mild hybrids overtook PHEVs with 4.2% of registrations, while PHEVs remained the smallest segment at 3.3%.
Provincial trends highlight a fractured market. Quebec continues to lead in ZEV adoption, with ZEVs representing 11.8% of new registrations and accounting for 45.9% of national ZEV volume. By contrast, Ontario, British Columbia, and Alberta have shifted toward hybrids, with full hybrids achieving 14.6%, 16.9%, and 12.3% market shares, respectively, while BEVs lag behind.
Industry analysts attribute the shift to consumer pragmatism driven by economic and infrastructural factors. High interest rates, limited charging infrastructure, range anxiety, and reduced federal and provincial incentives, along with tariffs on Chinese BEVs, have increased demand for hybrid vehicles, which offer lower upfront costs and flexibility.
The trend poses challenges for Canada’s federal ZEV mandate, aimed at achieving 100% new ZEV sales by 2035. Automakers and policymakers may need to adjust strategies to bridge the gap between consumer preferences and policy goals.
The data underscores that while Canada’s electrification efforts continue, hybrid technology is emerging as a transitional solution, enabling broader adoption of electrified mobility while supporting long-term ZEV growth.
