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Canada’s new EV rebate program is already seeing massive demand, with more than $122 million in EV rebate claims submitted since the federal government relaunched incentives earlier this year. But while Canadians rush to take advantage of the new EV rebate program, many auto dealers say they are still waiting to be repaid by Ottawa, creating growing frustration across the industry.
The federal government revived its electric vehicle affordability program, known as EVAP, on February 16, bringing back thousands of dollars in incentives for Canadians buying eligible electric vehicles. Since then, the EV rebate program has generated strong interest from consumers looking to save money on new EVs and plug-in hybrids.
According to Transport Canada, 24,389 EV rebate claims have already been recorded under the new program. The total value of those claims has now crossed $122 million, highlighting how quickly Canadians returned to the EV market once incentives became available again.
Canada’s EV Rebate Program Sparks Huge Demand for Electric Vehicles
The return of the EV rebate program immediately boosted electric vehicle sales across Canada. After the previous iZEV rebate program ended in January 2025 because funding ran out, EV sales dropped sharply nationwide.
Industry data showed electric vehicle purchases fell from nearly 18 per cent of all new vehicle sales to below 10 per cent after the rebates disappeared. But the launch of the new EV rebate program changed the market almost instantly.
Sales of electric vehicles jumped more than 80 per cent in March compared with February, showing just how important EV rebates are for Canadian consumers.
The federal government’s new EV rebate program offers up to $5,000 for eligible fully electric vehicles and up to $2,500 for qualifying plug-in hybrid models. Ottawa has allocated $2.275 billion for the program, which is expected to continue for up to five years unless the funding runs out earlier.
Despite the strong consumer response, many dealerships say the rollout of the EV rebate program has not gone smoothly.
Canadian Auto Dealers Waiting for EV Rebate Payments
Under the EV rebate program, dealerships reduce the price of the vehicle immediately for the customer and then apply to the federal government for reimbursement. However, many dealers claim the repayments are taking too long.
The Canadian Auto Dealers Association says some dealerships are waiting for more than $200,000 in unpaid EV rebate reimbursements.
Huw Williams, spokesperson for the association, said the delays are hurting dealer cash flow because businesses are effectively advancing money on behalf of the federal government.
According to dealers, some EV rebate claims have even been rejected over simple administrative errors, including small typos on forms or incorrect sale dates entered accidentally.
Williams said dealers lost confidence after the major delays seen under the old iZEV rebate system last year and worry similar problems may continue under the new EV rebate program.
The association says there is currently no proper appeal process for rejected rebate claims, adding to frustration among dealerships trying to process growing EV demand.
Transport Canada Responds to EV Rebate Complaints
Transport Canada acknowledged the concerns and said it is working to resolve issues involving rejected claims and repayment delays.
The department stated that complete and validated EV rebate claims are continuing to be processed and reimbursed. Officials also confirmed they are reviewing cases where administrative mistakes may have caused claims to be denied unfairly.
Transport Canada noted that processing times may vary depending on the number of submissions and the validation process required for each claim.
Another complication came from delays in launching the new claims portal. Although the EV rebate program officially restarted on February 16, dealerships could not begin filing claims until April 6 because the portal system was not ready earlier.
That delay added pressure on dealerships already trying to manage increased customer demand for electric vehicles.
Toyota bZ and Chevrolet Equinox EV Lead EV Rebate Claims
The new EV rebate program database also revealed which electric vehicles Canadians are buying most frequently.
The Toyota bZ emerged as the most popular EV model under the rebate system with 4,088 claims submitted so far. The Chevrolet Equinox EV followed closely behind with 3,065 claims.
Canadian-made EVs are also eligible under special rules within the EV rebate program. Currently, the Dodge Charger EV and Chrysler Pacifica plug-in hybrid qualify for exemptions from the usual vehicle price cap.
Transport Canada reported that 59 claims were submitted for the Dodge Charger and 14 claims for the Chrysler Pacifica since the relaunch of the rebate program.
The federal government hopes the EV rebate program will help put 840,000 new electric vehicles on Canadian roads over the coming years.
Which Vehicles Qualify Under Canada’s EV Rebate Program?
The EV rebate program only applies to vehicles priced below $50,000, although some Canadian-made models receive exemptions from that cap.
The government also introduced stricter trade-related eligibility rules. Imported electric vehicles qualify only if they come from countries that have free-trade agreements with Canada.
That change has significantly impacted Tesla and other Chinese-built EVs.
Under the previous iZEV rebate program, Tesla vehicles accounted for nearly 30 per cent of all rebate claims during late 2025. But now, Chinese-built Tesla models are excluded from the new EV rebate program because they do not meet the updated trade requirements.
The rule changes could reshape Canada’s EV market over the next several years as consumers shift toward eligible North American, European, Japanese, and Korean electric vehicles.
Canada’s EV Rebate Program Will Gradually Shrink Before Ending
While the EV rebate program currently offers up to $5,000 in incentives, those rebates are not expected to remain at current levels forever.
The federal government plans to gradually reduce EV rebate amounts each year before fully phasing out the program by 2030.
Officials say the goal is to help accelerate EV adoption while Canada’s electric vehicle industry continues to grow and vehicle prices eventually become more affordable without government support.
For now, however, the huge number of EV rebate claims proves Canadians are still highly dependent on financial incentives when purchasing electric vehicles.
The early success of the EV rebate program shows strong demand for cleaner transportation options, but ongoing dealer payment delays could create major challenges if the federal government does not improve reimbursement systems quickly.
As electric vehicle adoption continues rising across Canada, both consumers and dealerships will be watching closely to see whether Ottawa can keep the EV rebate program running smoothly while handling billions of dollars in future claims.