Tesla’s vehicle sales in Canada fell sharply in January, as the automaker and other electric vehicle (EV) brands faced the impact of reduced federal and provincial incentives alongside recent price increases. Preliminary data from S&P Global, cited by the Toronto Star, indicated Tesla sales dropped by 70% from December 2024 to January 2025, while overall EV and plug-in hybrid (PHEV) sales declined by 79% over the same period.
The sales downturn was not exclusive to Tesla. Chevrolet EV sales fell by 65%, while Hyundai recorded a 30% month-over-month decline, according to S&P Global. The sudden pause of Canada’s federal iZEV rebate program, which affected all automakers, coupled with Tesla’s price hikes in January, contributed to the steep decline.
See also: Tesla to Raise Electric Vehicle Prices in Canada Starting Feb. 1
These increases also led to the loss of some provincial incentives, raising the effective cost of Tesla vehicles by as much as C$21,000 in Quebec and C$18,000 in British Columbia, the country’s two largest EV markets.
“Consumers in Canada are price sensitive, and with these changes to the federal and provincial rebates, it’s negatively impacting what vehicles customers are looking to buy,” said James Hearn, Associate Director of Marketing Reporting, in comments to the Toronto Star.
See also: Canada’s iZEV Programme Paused Due to Funds Depletion; Future Uncertain
Despite the month-over-month drop, year-over-year EV sales in Canada remain strong. S&P Global data shows a 30% increase in overall EV sales in January 2025 compared to January 2024. However, uncertainty surrounding the iZEV program is expected to weigh on February sales. Automakers including Polestar, General Motors, and Nissan have introduced C$5,000 incentives to offset the federal rebate cut.
With Canada’s Liberal leadership race nearing its conclusion, political developments could bring further clarity on future EV incentives. The New Democratic Party has proposed a C$10,000 rebate for Canadian-made EVs and potential tariffs on Tesla imports, signaling ongoing discussions over the country’s EV policy direction.
See also: Tesla Raises Prices for Model X in Canada and the U.S., Excludes Tax Credit Eligibility in the U.S.
