OTTAWA — An analysis of electric vehicles eligible for the new federal rebate suggests the $50,000 price cap targets models that sell for substantially more than their gas-powered counterparts—where the subsidy is more likely to influence consumer choices.

“While some may have wished the new $5,000 federal incentive included more eligible EVs, our analysis finds the program has a logic as designed,” says Clean Energy Canada in a forthcoming report that examines the potential efficacy of the rebate. The energy think tank based at Simon Fraser University gave The Logic an early look at the findings, which are part of a larger report on household savings linked to electrification and energy efficiency.

On Feb. 5, the federal government announced a new consumer rebate program for EVs and plug-in hybrids as part of a national auto strategy that also put an end to the federal sales mandate. The revamped program limits eligibility to new vehicles with a final transaction value no higher than $50,000, including optional features and dealership fees. 

While Electric Mobility Canada welcomed the return of the rebate, it lamented the cap as “too restrictive,” saying it “risks excluding many vehicles Canadians need, particularly for families, rural residents, and tradespeople who need larger vehicles.” The previous iZEV program was available to cars with a base model price under $55,000, or $60,000 for SUVs, pickup trucks and minivans, but the final transaction value could be higher.

There is no price cap for any eligible vehicles manufactured in Canada, but there are only two of them: the Chrysler Pacifica, a plug-in hybrid that Stellantis is phasing out, and the all-electric Dodge Charger. Both are assembled at the Stellantis plant in Windsor, Ont. (The Chrysler parent company postponed production of the 2026 Charger EV last year due to U.S. tariffs.)

The $2.3 billion the federal government earmarked for the five-year incentive, now called the Electric Vehicle Affordability Program, will cover up to $5,000 off battery-electric and fuel cell electric vehicles or up to $2,500 off plug-in hybrid vehicles. The amounts will drop each year until the incentive ends in 2031.

Citing examples, Clean Energy Canada’s report says the conditions on the rebate mean it helps consumers when they need it most. The electric BMW i4, for one, has too high a price tag for the incentive, yet costs only about $2,500 more than its gas-powered equivalent. “As a result, the electric version breaks even on costs in about a year even without any rebate—and saves money every year after,” says the report to be published Thursday. 

“More affordable EVs like the Kia EV4, Hyundai Kona and Chevrolet Equinox have pre-rebate prices that are $12,000 to $15,000 higher than their gas counterparts,” it continues. “Incentives help close price gaps where they’re largest—improving EV access for middle-class cars in a fair and targeted way.”

That argument is weaker when it comes to plug-in hybrids. “Unlike gas cars and conventional hybrids,” the report says, “plug-in hybrids are not necessarily cheaper than their all-electric counterparts upfront, and they cost more to drive and maintain.”

Meanwhile, the Conservatives are highlighting how much of the federal money is flowing outside Canada.

Last month, Transport Canada provided internal estimates to the House of Commons that suggest Canadian-made EVs would account for five per cent of those eligible for the subsidy. There were 682 Chrysler Pacificas and 678 Dodge Charger EVs sold in 2025, the data shows, compared to 25,951 foreign-made EVs or plug-in hybrids below $50,000. Thirty-six per cent of the latter were from Japan, 28 per cent from the U.S. and 26 per cent from South Korea. Canadian vehicles made up a similar share of EV and plug-in hybrid sales in the two previous years.

“The vast majority of these subsidies are going to go to foreign countries, including the United States, whose president has declared war on our auto industry. I don’t know how you justify that,” Conservative MP Kyle Seeback, who sought the numbers in an order paper question, told Industry Minister Mélanie Joly Feb. 9 when she appeared before the House of Commons industry committee. Seeback was not available for an interview, but wrote in a social media post: “Your money [is] funding foreign cars.”

Trevor Melanson, communications director at Clean Energy Canada, said exempting Canadian-made EVs from the cap is another kind of incentive. “It’s primarily a consumer policy,” he said, but noted that it is also designed to encourage automakers to produce cars in Canada. “That aspect of it is actually an industrial strategy.”

The rebate is restricted to imports from countries with which Canada has a free trade agreement. The 49,000 Chinese-made EVs per year that Canada is exempting from 100 per cent tariffs do not make the cut. To address affordability, Ottawa is reserving a portion of its Chinese EV quota for vehicles priced below $35,000. It estimates that share will exceed 50 per cent by 2030.

There is another way Chinese EVs could become eligible for the rebate. The Liberal government hopes the deal that Prime Minister Mark Carney struck in Beijing will drive Chinese carmakers to form joint ventures that set up production in Canada. Bloomberg reported last week that Stellantis is in talks with its Chinese partner Leapmotor about making EVs at its idled plant in Brampton, Ont., although Joly joined Ontario Premier Doug Ford and Unifor in rejecting the idea of a “knock-down kit” factory, saying any plans by Stellantis must support the local supply chain.

The federal government said the $2.3 billion set aside for the incentive is enough to cover about 840,000 vehicles by 2031, an average of 168,000 per year. Judging by current sales, that’s a lofty target. In 2025, only 27,321 models eligible for the rebate program were sold in Canada.

That was the same year Ottawa paused its iZEV program. Joly later told The Logic that Ottawa was committed to its return. Would-be EV buyers were in wait-and-see mode, Melanson said, reluctant to purchase a new vehicle that might have qualified for a rebate if they had waited a few months. That makes it hard to extrapolate much from last year’s data, he said. “Everybody was just waiting on the sidelines.”