More cars, SUVs to qualify for federal ZEV incentive, but max rebate still $5,000

Some pricier cars and bigger zero-emissions pickups and SUVs — retailing for as much as $70,000 — will soon be eligible for a rebate under an expanded federal Incentives for Zero-Emission Vehicles Program (iZEV).

The new criteria outlined Friday will offer an unchanged maximum incentive of $5,000 for zero-emission cars whose base model price is less than $55,000. Higher cost variants up to $65,000 will also be covered by the iZEV program. This compares to base models and costlier variants retailing for, respectively, less than $45,000 and $55,000, under the previous framework.

Larger vehicles, such as SUVs, minivans and pickups, with base prices below $60,000 and variants priced up to $70,000 with options will also qualify. Previously, base model costs were set at $55,000 and vehicles were required to have seven or more seats.

The redesign of the program also eliminates a minimum seat count for larger vehicles, which will allow more pickups and SUVs to qualify. the changes go into effect April 25.

Minister of Transport Omar Alghabra said Friday that broadening the iZEV program will give Canadians more flexibility when choosing an ZEV.

The iZEV program was introduced in 2019 and has so far helped facilitate the purchase or lease of 141,000 new EVs. But auto sector groups have criticized the government’s eligibility criteria for the program, saying the low thresholds will prevent EV uptake because popular, larger vehicles do not qualify.

Auto industry advocates say the changes drive the iZEV program toward supporting the SUV and pickup markets, which accounts for more than 80 per cent of sales, but “falls short.”

“Simply increasing the limits to make a few more vehicles eligible for the program without increasing the amount of the incentive doesn’t address the affordability issue,” said Canadian Automobile Dealers Association (CADA) CEO Tim Reuss.

CADA, along with the Canadian Vehicle Manufacturers' Association (CVMA), which represents the interests of the Detroit Three automakers in Canada and Global Automakers of Canada (GAC), which represents overseas automakers in Canada, have recently advocated for a $15,000 ZEV purchase incentive.

In addition to increasing the eligibility criteria for ZEVs, Transport Canada also adjusted how the iZEV program supports plug-in hybrids, swapping electric range for battery capacity.

Ottawa is now classifying a PHEV as “longer-range” if it has an electric range greater than 50 kilometres. These PHEVs are eligible for the full $5,000 EV incentive, while PHEVs with shorter ranges receive $2,500.

The CVMA issued a statement on Twitter, saying the new qualifications aren't enough.