Electric vehicle sales in Canada declined nearly 40% in the second quarter from a year earlier.
Registrations of new electric vehicles plunged 39.2% year-over-year in Q2, while plug-in hybrid registrations dipped 2.2%, according to data from Statistics Canada.
The steep drop in electric vehicle sales comes even though overall vehicle sales during the quarter totaled 541,566, the highest level in five years and a 5.9% increase from a year ago.
Statistics Canada attributed the drop in electric vehicle sales to the removal of several government rebates that had reduced the cost of a battery-powered car.
In January, the federal government’s consumer rebate program ran out of funds and Quebec temporarily paused its rebate program in February. British Columbia eliminated its rebate program entirely in May of this year.
Quebec and B.C., which had accounted for 60% of all electric vehicle sales in Canada, registered declines of 38% and 27%, respectively in Q2. Electric vehicle sales in Ontario fell 19%.
The latest sales data comes as Prime Minister Mark Carney announced a one-year suspension of the federal government’s electric vehicle mandate.
That mandate had required that 20% of all new vehicle sales be zero-emission for the 2026 model year.
Missing that target would have triggered fines unless an automaker purchased credits from a rival such as Tesla (TSLA).
Prime Minister Carney also launched a 60-day review of Canada’s electric vehicle mandate.
TSLA stock has declined 9% this year to trade at $346.40 U.S. per share.
