Feds Halt $5,000 EV Rebates as Money Has Run Out

The federal Incentives for Zero-Emission Vehicles (iZEV) program has officially paused as of January 12, 2025, explained Transport Canada on Sunday.

The program, which provided rebates for purchasing or leasing new zero-emission vehicles (ZEVs), ran out of funds earlier than its planned end date of March 31, 2025, due to high demand.

“This surge in interest has led to a faster depletion of resources than anticipated, necessitating the pause of the iZEV Program earlier than March 31,” said Transport Canada.

The pause affects new applications for rebates, meaning no additional incentives will be granted moving forward. However, rebates will still be provided to those who were pre-approved by their dealerships before the program’s closure, as long as all other conditions are met.

Customers who ordered vehicles but did not have their applications submitted and approved before January 12 will not qualify for rebates, says the feds. Ouch.

This change does not impact provincial or territorial incentive programs or the federal program for medium- and heavy-duty zero-emission vehicles, which operate independently. Transport Canada did not say whether the iZEV program will get additional funding or if a similar initiative will replace it.

We told you how Tesla increased the price of its Model 3 and Model Y just ahead of the iZEV program was officially paused. Other automakers selling EVs that qualified for the rebate will now see their prices increase, as the $5,000 rebate was a generous incentive to switch to a hybrid or EV (well, on the taxpayer’s dime of course).

These were the iZEV Price Limits on hybrids and full electric vehicles:

• Passenger cars (sedans, wagons, hatchbacks):
  • Base model price must be below $55,000.
  • Higher trims of the same model were eligible if priced under $65,000.
• Larger vehicles (SUVs, vans, pickups):
  • Base model price must be below $60,000.
  • Higher trims were eligible if priced under $70,000.

If you bought a hybrid of EV recently and qualified for the federal rebate, consider yourself lucky. The feds aren’t alone is suspending its EV rebate program. Quebec will be doing so starting next month as its program has also run out of money.