One big-name EV just got a whole lot cheaper. 

Toyota slashed US$6,000 from the price of the 2025 bZ4X in the U.S. on Tuesday, putting the small electric SUV in reach for more buyers even though the country’s president-elect, Donald Trump, may cut the consumer incentives that knock US$7,500 off the price of an EV. 

The question now is whether other automakers will follow Toyota’s lead as incentive programs around the world sunset—including those in Canada. 

Quebec this week announced an early halt to its Roulez vert EV incentive program after the program ran out of funds, despite the province’s plans to ban sales of both new and used gas vehicles after 2035. Newfoundland and Labrador’s incentives are also set to end this spring. The federal government’s iZEV program is scheduled to end in March 2025, according to Transport Canada’s website.

There are two paths forward from here, and the one Toyota has forged looks a whole lot brighter for car buyers. 

The Toyota Way: Toyota’s price cut is part of a larger trend. Analysts expect automakers to offer more incentives across the board next year. Irina Im, of the consulting and accounting firm RSM Canada, noted that car companies need to clear dealership inventories. “Following a period where cars were sold at or even above the manufacturer’s suggested retail prices, the sector is seeing a return to sales discounts,” she wrote in a recent analysis.

Im isn’t alone. “We expect recent rate cuts and a potential increase in [automaker] incentives to support the level of new vehicle sales in 2025,” wrote Chris Murray and Kyle Brock in a research note for ATB Capital Markets. 

While batteries are now nearly as cheap as gas engines, any price cuts would help the EV transition in Canada, where prices need to drop by about a third to be within reach of most car buyers, according to Scotiabank’s Rebekah Young and John Fanjoy. They wrote last year that “the biggest risk—or the most underrated one—is that we might be backing the cars that people want today but cannot afford tomorrow.” 

“Those affordability gaps are much larger than policy alone could (or should) address, and in light of current policy uncertainty, suggests agility of market players will be important,” Young told me in an email this week.  

Less Black Friday, more Black Monday: Offsetting fading incentives with price cuts hasn’t worked too well for other automakers so far.

Germany, for example, decided a year ago to yank its EV incentive program. Some companies, like Tesla, made up the price difference with discounts and did just fine. But most European automakers are spiralling without extra support from the continent’s biggest economy. 

Ford has also tried and failed to compete in price wars with Tesla over the past few years.

What’s ahead in Canada: The good news is that Toyota’s 2025 bZ4X—while only available in B.C. and Quebec, so far—is that the new trims are being introduced at lower price points off the bat, based on numbers in Toyota Canada’s Dec. 13 press release. 

Transport Minister Anita Anand’s office didn’t tell The Logic whether the government plans to extend the iZEV incentives. Instead, press secretary Laurent de Casanove simply noted the success of the iZEV program and said, “Minister Anand is committed to delivering on these priorities throughout the length of her mandate.”

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