Surging energy prices at the pump are pushing more Canadians toward electric and hybrid vehicles, according to new data from Statistics Canada released on Thursday.
While overall motor vehicle sales dropped by 6.6 per cent in March compared to the same time last year, the zero-emission vehicle (ZEV) market saw a significant spike. Canadians purchased 21,574 new ZEVs last month, representing a 74.7 per cent increase over March 2025.
In March 2025, zero-emission models accounted for only 6.6 per cent of all new car sales. That figure nearly doubled to 12.2 per cent last month as motorists looked for relief from high gas and diesel costs.
The rate comparison site Rates.ca reported that car insurance quotes for electric vehicles jumped 40 per cent last month compared to a year ago. Additionally, the pre-owned platform Clutch saw a 54 per cent increase in EV searches since the start of the war in Iran.
Clutch CEO Dan Park noted that the data clearly shows a relationship between rising gas prices and interest in electric models, as Canadians actively explore alternatives to traditional combustion engines.
The pressure at the pumps shows no signs of slowing down. Ongoing conflict in Iran continues to choke the Strait of Hormuz, which is essential for shipping oil worldwide. On Friday, the average prices for gas in Canada were 188.2/L according to CAA, compared to the year ago average of 135.5/L. GasBuddy data shows the cheapest gas in Canada right now is in Manitoba at 181.8, while outside of the Northwest Territories at 304.4, Newfoundland is at 213.6 and BC is at 206.7/L.
Tesla recently slashed the price of the Model 3 Rear-Wheel Drive, bringing the entry point down to $39,490 for units arriving from Giga Shanghai. With financing starting at $479 per month, the cost of ownership now rivals what many Canadian drivers are already paying just to keep a gas-powered vehicle on the road.
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