War in Hormuz sparking more EV sales

After months of sluggish sales, electric vehicles are getting a boost from high gas prices and renewed government incentives.

EV sales have climbed since January, when the Liberal government restored incentives, and just before the U.S. and Israel launched strikes on Iran, sparking a Middle East war that sent gas prices soaring.

According to Statistics Canada data, Canadians bought 8,672 new EVs in January. That rose to 12,547 in February and 21,574 in March, before dipping down to 17,795 in April.

Taken together, EV sales in the first four months of 2026 were up 20.8 per cent compared to the same period in 2025.

More Canadian car shoppers are also considering an EV. An annual JD Power survey of new-car shoppers found that 34 per cent of respondents were somewhat or very likely to buy an EV as their next vehicle — up from 28 per cent the year before.

Industry analysts say affordability is driving the renewed interest, as gas prices remain high and EV incentives return.

"I think for the most part, Canadians were just … simply doing the math," said J.D. Ney, managing director for JD Power Canada.

Canada’s auto industry is betting the government’s EV rebate revival will help accelerate slow electric vehicle sales, though some consumers still worry about limited range and charging infrastructure.

The rebound follows a year of sluggish EV sales.

In 2024, when the federal government's first EV incentive program was in place, Canadians routinely bought more than 20,000 EVs a month. But after the incentives were cancelled, monthly sales dropped.

Fuel costs jumped after the U.S. and Israel launched strikes on Iran in late February, restricting tanker traffic through the Strait of Hormuz. Canadian pump prices have eased from recent highs, but the national average was still $1.63 a litre as of Friday afternoon — 24.1 cents higher than last year's average, according to fuel-tracking site GasBuddy.com.

If gas prices fell again, as partly happened in 2022 when prices dropped after reaching an all-time high. But he said some shoppers still wanted to switch to EVs to avoid future price shocks.

Cost could also lead some buyers to consider Chinese EV brands, if and when they enter Canada.

Nearly a third of all new car shoppers surveyed by JD Power said they would consider a Chinese brand, which generally come with a lower sticker price. That figure rose to more than half among shoppers interested in buying an EV as their next vehicle.

"The expected … low price point is by far the biggest driver of that interest," Ney said.

Canada's auto market is officially open to Chinese EVs, but you won't see cheaper models right away.

While the federal government will now allow 49,000 Chinese EVs into Canada annually at a reduced tariff rate, regulatory an