Electric car charging beside a Canadian home in official Canada Energy Regulator imagery

news July 30, 2026

Canada's EV Sales Could Jump 40% in 2026, J.D. Power Forecasts

J.D. Power forecasts Canadian EV sales will rise 40.2% in 2026 and reach 13.1% market share, but plug-in hybrids and renewed incentives are doing important work.

By Marcus Holloway

Canada’s electric-vehicle market is heading for a much stronger 2026 than last year’s sales slump suggested.

J.D. Power’s latest global EV forecast projects that Canadian battery-electric and plug-in hybrid sales will rise 40.2 per cent this year. Together, those plug-in vehicles are expected to capture 13.1 per cent of Canada’s new light-vehicle market, nearly matching the 13.7 per cent peak recorded in 2024.

The forecast is an encouraging sign for a market that lost momentum when federal and provincial incentives changed. It is not a return to uninterrupted growth, though, and the headline needs one important qualifier: J.D. Power combines battery-electric vehicles and plug-in hybrids in its EV total.

That distinction helps explain both the rebound and what Canadian shoppers are actually buying.

The Recovery Has Already Started

The 40.2 per cent figure is a full-year forecast, not a sales result already achieved.

The underlying January-to-May data is more restrained. J.D. Power says Canadian plug-in sales increased 5.3 per cent year over year to 78,512 vehicles during the first five months of 2026.

Battery-electric vehicles accounted for 80.4 per cent of those deliveries and grew by 3.0 per cent. Plug-in hybrids did more of the lifting, with sales up 16.2 per cent over the same period.

That split matters. Canada is not simply snapping back to its 2024 EV peak on the strength of pure-electric models. PHEVs are growing faster as shoppers look for lower fuel use without depending entirely on charging infrastructure.

The appeal is understandable. A plug-in hybrid can cover a daily commute on electricity while retaining a gasoline engine for long winter trips, apartment dwellers with inconsistent charging, or households that need one vehicle to handle every job.

The trade-off is that a PHEV only delivers its best fuel and emissions benefits when it is charged regularly. Buyers who cannot plug in at home or work should compare a conventional hybrid rather than paying for a battery they rarely use.

Incentives Are Back in the Equation

J.D. Power points to Canada’s new Electric Vehicle Affordability Program as one of the policy changes shaping the market.

EVAP brought federal purchase support back for eligible transactions in February. The program can provide up to $5,000 for qualifying battery-electric and fuel-cell vehicles and up to $2,500 for qualifying plug-in hybrids, subject to transaction-value, assembly-location, lease-term, and other rules.

That support arrived after the previous iZEV program paused in early 2025, a change that contributed to a sharp market reset. Statistics Canada reported that zero-emission vehicles fell from 13.8 per cent of new-vehicle sales in 2024 to 8.7 per cent in 2025.

Renewed incentives do not explain every sale. More affordable models, manufacturer rebates, higher fuel costs, and a broader selection of electric crossovers are all part of the rebound. But a point-of-sale incentive can move a borderline purchase back within budget, especially when financing costs remain high.

For shoppers, the practical rule is unchanged: confirm the exact vehicle and transaction qualify before treating an advertised rebate as money in hand. MotorLinks’ Canadian EV incentive guide tracks the broader framework, but the written dealer quote and current Transport Canada eligibility list decide the deal.

A 40% Jump Still Leaves Canada Below Its Old Peak

Fast growth sounds dramatic because the comparison starts from a weak 2025 base.

Even if J.D. Power’s forecast is accurate, a 13.1 per cent plug-in share would remain 0.6 percentage points below Canada’s 2024 high. The market would be recovering lost ground rather than breaking into a new adoption phase.

The longer-range forecast is more ambitious. J.D. Power expects Canadian EV share to reach:

24.1 per cent in 2030
42.5 per cent in 2035
61.8 per cent in 2040

Those are projections, not policy targets or guaranteed outcomes. They depend on affordable vehicle supply, consistent incentives, charging buildout, trade conditions, and automakers continuing to offer competitive EVs and PHEVs in Canada.

There is also a useful contrast with the United States. J.D. Power expects U.S. plug-in sales to fall 15.5 per cent in 2026, leaving EVs at 8.2 per cent of the light-vehicle market. Canada’s recovery therefore looks less like a continent-wide surge and more like a response to its own changing incentives, product mix, and fuel-cost pressures.

What the Forecast Means for Canadian Buyers

The best part of a stronger market is not the headline percentage. It is the pressure it puts on automakers to compete.

More sales can support better inventory, broader dealer training, stronger used-EV supply, and more attention to Canadian pricing. General Motors, for example, says it already captured more than one-fifth of Canadian EV registrations through June with a lineup spanning the Chevrolet Bolt, Equinox EV, Cadillac OPTIQ, and larger electric trucks and SUVs.

Competition should also make it harder to sell an EV solely on novelty. Range, winter efficiency, charging speed, service coverage, insurance cost, and the final financed price all need to stand up against a growing field.

Canadian buyers should read the forecast as evidence that the market is viable again, not as a reason to rush. A strong EV deal still starts with reliable home or workplace charging and enough cold-weather range. A strong PHEV deal starts with a routine that will actually use its battery.

The rebound is real enough to matter: sales were already growing through May, PHEVs were gaining quickly, and incentives are back. The 40.2 per cent forecast is the optimistic next step.

If Canada reaches it, 2026 will look like the year the EV market recovered from its policy-driven dip. It will not yet be the year plug-in vehicles became mainstream.