How to Save Money with the Federal iZEV Program for Electric Vehicles

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Key Takeaway Box

  • The federal iZEV Program offers up to $5,000 in incentives for buying or leasing a new light-duty zero-emission vehicle (ZEV), such as a battery-electric, plug-in hybrid, or hydrogen fuel cell vehicle.
  • The program is available until March 31, 2025, or until the funding runs out.
  • To be eligible, the vehicle must meet certain criteria, such as price, range, and safety standards. You can check the list of eligible vehicles on Transport Canada’s website.
  • The incentive is applied at the point of sale or lease by the dealer or authorized seller. You don’t need to apply separately or fill out any forms.
  • You can combine the federal incentive with provincial or territorial incentives, if available, to save even more money on your ZEV purchase or lease.
Modern electric vehicle showcasing savings with iZEV program, featuring eco-friendly elements like wind turbines and solar panels.
Discover How the Federal iZEV Program Can Save You Money on Eco-Friendly Electric Vehicles.

If you’re looking for a way to save money and reduce your environmental impact, you might want to consider switching to a zero-emission vehicle (ZEV). A ZEV is a vehicle that does not emit any tailpipe emissions, such as carbon dioxide, nitrogen oxides, or particulate matter. ZEVs include battery-electric, plug-in hybrid, and hydrogen fuel cell vehicles.

ZEVs have many benefits, such as:

  • Lower fuel and maintenance costs
  • Reduced greenhouse gas emissions and air pollution
  • Improved energy security and diversity
  • Enhanced innovation and competitiveness

However, ZEVs also have some challenges, such as:

  • Higher upfront purchase cost
  • Limited availability and variety of models
  • Insufficient charging or refuelling infrastructure
  • Lack of consumer awareness and acceptance

To address these challenges and encourage more Canadians to switch to ZEVs, the federal government launched the Incentives for Zero-Emission Vehicles (iZEV) Program in 2019. The iZEV Program offers up to $5,000 in incentives for buying or leasing a new light-duty ZEV. The program is funded with $300 million over three years and is scheduled to run until March 31, 2025, or until the funding runs out.

In this article, we’ll explain how the iZEV Program works, which vehicles are eligible, and how much you can save on your next ZEV purchase or lease. We’ll also provide some tips and resources to help you make the best decision for your needs and budget.

IMPORTANT LINKS

How the iZEV Program Works

The iZEV Program is designed to make ZEVs more affordable and accessible for Canadians. The program provides incentives for buying or leasing a new light-duty ZEV, which includes most personal vehicles, such as cars, SUVs, and light pick-up trucks.

The incentive amount depends on the type and range of the vehicle, as follows:

  • $5,000 for battery-electric, hydrogen fuel cell, and longer-range plug-in hybrid vehicles
  • $2,500 for shorter-range plug-in hybrid vehicles

The incentive is applied at the point of sale or lease by the dealer or authorized seller. You don’t need to apply separately or fill out any forms. The dealer or seller will deduct the incentive amount from the final price of the vehicle before taxes. The dealer or seller will then submit a request for reimbursement to Transport Canada, the department responsible for administering the program.

The incentive is not taxable and does not affect the eligibility or amount of any other federal, provincial, or territorial benefits, such as the GST/HST credit or the Canada Child Benefit. However, the incentive may affect the calculation of capital cost allowance for business use of the vehicle.

You can combine the federal incentive with provincial or territorial incentives, if available, to save even more money on your ZEV purchase or lease. Some provinces and territories offer additional incentives and rebates for buying new or used ZEVs, installing residential chargers, or covering shipping costs. You can check the applicable provincial or territorial websites for up-to-date information on the incentives available in your region.

Which Vehicles are Eligible

To be eligible for the iZEV Program, a vehicle must meet certain criteria, such as price, range, and safety standards. The vehicle must:

  • Meet all of Canada’s Motor Vehicle Safety Standards
  • Be meant for use on public streets, roads, and highways
  • Have at least four functioning wheels and be able to drive on a highway (in other words, not a low-speed vehicle)
  • Be a new vehicle registered for the first time (demonstrators with less than 10,000 km are considered new vehicles)
  • Have a base model manufacturer’s suggested retail price (MSRP) of less than $55,000 for passenger cars, or less than $60,000 for station wagons, pick-up trucks, SUVs, vans, and special purpose vehicles
  • Have higher trim levels eligible up to a maximum of $65,000 for passenger cars, or $70,000 for station wagons, pick-up trucks, SUVs, vans, and special purpose vehicles
  • Have an electric range of at least 50 km for plug-in hybrid vehicles

You can check the list of eligible vehicles on Transport Canada’s website. The list is updated regularly as new models are approved. If you have any questions about a particular make or model, you can contact the auto manufacturer or your local dealership.

Some examples of eligible vehicles are:

  • Chevrolet Bolt EV
  • Ford Mustang Mach-E
  • Hyundai Kona Electric
  • Kia Niro PHEV
  • Nissan Leaf
  • Tesla Model 3
  • Toyota Prius Prime
  • Volkswagen ID.4

How Much You Can Save

The amount of money you can save with the iZEV Program depends on the type and range of the vehicle, the length of the lease, and the availability of provincial or territorial incentives. Here are some scenarios to illustrate the potential savings:

  • Scenario 1: You buy a new battery-electric vehicle with an MSRP of $45,000. You qualify for the federal incentive of $5,000, which reduces the final price to $40,000 before taxes. You also live in British Columbia, which offers a provincial incentive of $3,000 for battery-electric vehicles, which further reduces the final price to $37,000 before taxes. Your total savings are $8,000.
  • Scenario 2: You lease a new plug-in hybrid vehicle with an electric range of 60 km and an MSRP of $35,000 for 48 months. You qualify for the federal incentive of $5,000, which reduces the monthly lease payment by $104.17 before taxes. You also live in Quebec, which offers a provincial incentive of $4,000 for plug-in hybrid vehicles, which further reduces the monthly lease payment by $83.33 before taxes. Your total savings are $7,500.
  • Scenario 3: You buy a new hydrogen fuel cell vehicle with an MSRP of $70,000. You do not qualify for the federal incentive, because the vehicle exceeds the price cap of $65,000. However, you live in Ontario, which offers a provincial incentive of $8,000 for hydrogen fuel cell vehicles, which reduces the final price to $62,000 before taxes. Your total savings are $8,000.

As you can see, the iZEV Program can help you save a significant amount of money on your next ZEV purchase or lease. However, the incentive is not the only factor to consider when choosing a ZEV. You should also think about your driving needs, preferences, and lifestyle, as well as the availability and cost of charging or refuelling options, insurance, and maintenance.

Tips and Resources

To help you make the best decision for your needs and budget, here are some tips and resources to guide you:

  • Compare different models and features of ZEVs using online tools, such as Plug’n Drive’s Electric Vehicle Discovery Centre or Natural Resources Canada’s Fuel Consumption Ratings Search Tool.
  • Find out where you can charge or refuel your ZEV using online maps, such as PlugShare or the Alternative Fuels Data Center.
  • Learn more about the benefits and challenges of ZEVs, as well as the policies and programs that support them, by visiting Transport Canada’s Zero-Emission Vehicles website or Natural Resources Canada’s Electric Vehicles website.
  • Read reviews and testimonials from other ZEV owners, such as those featured on Plug’n Drive’s EV Stories or Electric Mobility Canada’s EV Voices.
  • Test drive different models of ZEVs at your local dealership or at special events, such as those organized by Plug’n Drive or Electric Mobility Canada.

Conclusion

The federal iZEV Program is a great opportunity to save money and reduce your environmental impact by switching to a zero-emission vehicle. The program offers up to $5,000 in incentives for buying or leasing a new light-duty ZEV, such as a battery-electric, plug-in hybrid, or hydrogen fuel cell vehicle. The program is available until March 31, 2025, or until the funding runs out.

To be eligible, the vehicle must meet certain criteria, such as price, range, and safety standards. You can check the list of eligible vehicles on Transport Canada’s website. The incentive is applied at the point of sale or lease by the dealer or authorized seller. You don’t need to apply separately or fill out any forms.

You can combine the federal incentive with provincial or territorial incentives, if available, to save even more

Source: (1) Eligible vehicles – Transport Canada. https://tc.canada.ca/en/road-transportation/innovative-technologies/zero-emission-vehicles/incentives-zero-emission-vehicles/eligible-vehicles. (2) Zero-emission vehicles – Incentives – Canada.ca. https://www.canada.ca/en/services/transport/zero-emission-vehicles/zero-emission-vehicles-incentives.html. (3) How To Get Your 2024 Electric Car Rebate in Canada – canadadrives.ca/. https://www.canadadrives.ca/blog/news/government-fuels-electric-vehicle-demand-with-electric-car-rebates-in-canada-and-top-affordable-electric-vehicles. (4) EV Incentives in Canada: How You Can Get Back Up To $10,000 in 2024. https://www.savvynewcanadians.com/ev-rebates-canada/. (5) Your Guide to Canada’s EV Rebates | RBC Personal Banking. https://www.rbcroyalbank.com/sustainable-finance-solutions/electric-car-guide/electric-car-rebates.html.

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