Are The Sale Rebates For Electric and Hybrid Cars Worth it?

Over the last few years, many drivers have started to reduce their carbon footprint by purchasing more environmentally friendly vehicles, namely electric vehicles (EVs) and hybrid cars. That said, such vehicles typically come with a steep price tag, discouraging many drivers from purchasing one.

To overcome this financial barrier and incentivize Canadians to buy EVs and hybrid vehicles, the Government of Canada offers the Incentives for Zero-Emission Vehicles (iZEV) Program to make these vehicles more affordable. 

Key Points

• The federal government offers rebates for consumers who purchase EVs and hybrid vehicles.
• The Government of Canada lists the specific vehicles that are eligible for rebates.
• Some provincial governments also offer their own rebate program for EVs and hybrid vehicles.

What Is The Rebate For Hybrid and Electric Cars?

The iZEV Program offers incentives for qualifying Canadians who purchase or lease an eligible zero-emission vehicle (ZEV). Only vehicles listed on the Canadian government’s website may qualify for an incentive when they’re purchased or leased for a minimum of 12 months on or after the date of eligibility.

Provincial governments may also offer their own incentives for drivers to purchase hybrid vehicles or EVs.

Essentially, if your vehicle is eligible for one of the federal or provincial ZEV incentive programs, you can use your rebate(s) to reduce the cost of your vehicle purchase.

How Much Are Canada’s ZEV Rebates?

Currently, there are two levels of federal rebates offered by the federal government that you can qualify for if you buy or lease an eligible ZEV:

• Short Range – Plug-in hybrid electric vehicles made for short distance drives can qualify for a $2,500 rebate.
• Long Range – Hydrogen fuel-cell, battery-electric, plug-in hybrids that are meant for longer drives are eligible for a $5,000 rebate.

Which Cars Are Eligible For The ZEV Rebates?

Before you apply for the federal ZEV rebates, keep in mind that you must own or lease specific types of cars in order to qualify. Here are some of the main requirements:

The vehicle must be new (demo vehicles that buyers test-drive with an odometer reading of under 10,000 km are also considered new vehicles and are eligible for the rebate)

• The vehicle must meet all of Canada’s Motor Vehicle Safety Standards
• The vehicle must be meant to be driven on public roadways
• The vehicle must have at least four functioning wheels and can be operated on a highway
• If a passenger car, the vehicle’s base model Manufacturer’s Suggested Retail Price (MSRP) must not exceed $55,000 (higher-priced trims up to a maximum MSRP of $65,000, may also qualify)
• If a station wagon, pickup truck, minivan, van, sport utility vehicle (SUV), or special purpose vehicle, the vehicle’s the base model MSRP must not exceed $60,000 (higher-priced trims up to a maximum MSRP of $70,000 may also qualify)

Although the exact conditions of Canada’s federal ZEV rebate program can change from year to year, here are some of the popular vehicles that are eligible:

Hybrid Vehicle Plug-Ins

• Audi A3 Sportback e-tron
• Chevrolet Volt
• Ford Fusion Energi
• Honda Clarity PHEV
• Hyundai Tucson
• Kia Niro PHEV
• Toyota Prius Prime

Check out our list of the best hybrid cars in Canada.

EVs

• Chevrolet Bolt
• Ford Focus Electric
• Hyundai Kona Electric
• Kia Soul EV
• Nissan Leaf
• Tesla Model 3
• Volkswagen e-Golf

These are just some of the zero-emissions vehicles that became eligible for the Federal iZEV Incentive Program. Keep in mind that this list is subject to change, so you’d be well-advised to check the government’s website before buying a hybrid or EV that’s eligible for the rebate.

Are Used Hybrids And EVs Eligible For A Rebate?

On a federal level, no. Vehicles must be new in order to qualify for the federal rebate program. However, there may be programs in provinces that offer such incentives.

For instance, in Quebec, drivers may qualify for up to $3,500 toward the purchase of used EV and hybrid vehicles.

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How Can I Get My ZEV Rebate?

To receive the ZEV rebate, follow these steps:

Step 1: Check The Vehicle’s Eligibility

Make sure the vehicle you’re looking to purchase or lease is on the program’s approved list. A few have been mentioned above. 

Step 2: Visit A Car Dealership

Go to your dealership and let the salesperson know that you’re looking specifically for a hybrid or EV that qualifies for the iZEV incentive.

Step 3: Sign The Consumer Consent Form

Fill out the Consumer Consent Form that the dealership provides you to verify your eligibility for the incentive.

Step 4: Complete The Transaction

Fill out the Incentive Received Form, after which the incentive will appear on your purchase or lease agreement. The dealership will submit the documentation necessary for the incentive reimbursement.

Incentive Limits

Limits are placed on the number of incentives that are available under the iZEV Program per year:

• Individuals: 1 incentive/year
• Businesses: Up to 10 incentives/year
• Provincial/Territorial/Municipal governments operating fleets: Up to 10 incentives/year
• Pre-Approved Carsharing companies: Up to 50 incentives/year

Do Provincial Governments Offer Hybrid And EV Rebate Programs?

Many provinces also offer their own specific incentive programs to those who purchase EVs or hybrid vehicles:

If you qualify, you may be able to combine the federal and provincial rebates to maximize your savings.

Are The Federal Or Provincial ZEV Rebates Worth It?

Whether it’s worth buying a hybrid or EV just to receive rebate depends on a few factors. Consider the following before choosing this route:

Your Travelling Style 

Some ZEVs can save you money on gas, especially if you go fully electric and consistently make short trips to the city, work, or the grocery store. However, electric cars may not be the greatest option for long-distance travelling because there are so few public charging stations in Canada. If you’re worried about that, you may want to go with a hybrid instead. 

Your Budget

ZEVs are relatively expensive, and a lot of drivers’ motivations revolve around the overall costs. When it comes to determining if the cost of a ZEV vehicle is worth it, you should take into consideration the initial price tag, any rebates you’ll be eligible for, and the yearly cost of fuel/charge cost. 

New Or Used ZEV 

Remember that you must buy or lease a new ZEV in order to qualify for the federal rebate, which may not be affordable for the everyday driver. If you want to buy used, you may not qualify.

Type Of ZEV

The potential costs and rebates of a ZEV can also vary depending on which car you buy or lease. For instance, hybrids may cost more to fuel than electric models if you use gas from time to time. While a regular car can be cheaper initially, fuelling is more expensive in the long run. 

Insurance

Many ZEVs are more expensive than regular gas-powered cars. As such, your monthly or yearly insurance premium could be higher if you buy or lease a hybrid or electric car. Your premium can also increase if you are below or above a certain age, you buy or lease a newer or more expensive model, or you have a poor driver’s history.

Charging Stations

As of late 2024, there are just over 27,000 public charging stations across Canada, which is relatively low compared to the number of traditional gas stations you’ll find. So, unless you’re planning to buy a long-range vehicle or install a private charger at your home or business, a ZEV may not be the most convenient or worthwhile choice.

Features, Repairs, And Environmental Impact

The more features you want in your ZEV, the higher its price and insurance costs can be. A fully electric car will usually cost more than a base model hybrid. Plus, maintenance costs for ZEVs can be higher because fewer mechanics are experienced with them. However, the fact that you’re leaving a smaller carbon footprint can be worth the extra cost.

Additional Reading

How Much Is The Sales Tax On Cars In BC?

Insuring An Electric Car In Canada

How to Finance a Hybrid or Electric Car

Final Thoughts

If you qualify, you could realize significant rebates, particularly when you combine both federal and provincial rebates. But before you make a car purchase, find out whether your vehicle qualifies, and whether the province you live in also has its own incentive program.

iZEV FAQs