08:07 AM EST, 02/06/2026 (MT Newswires) -- Canada's zero-emission vehicle (ZEV) sales are on track to drop 35% year over year -- more than 90,000 fewer units in December -- after federal incentives were removed, said Bank of Montreal (BMO).

With new-vehicle affordability already strained, higher upfront costs have pushed consumers away from ZEVs in Canada and the United States, noted the bank.

On Thursday, Prime Minister Mark Carney announced a major policy pivot: ending the electric vehicle (EV) mandate and reinstating federal incentives.

Starting as early as Feb. 16, ZEVs priced up to $50,000 -- with no cap for Canadian-built models -- will again qualify for rebates of up to $5,000, alongside $1.5 billion in new charging infrastructure funding, pointed out BMO.

Given how sharply sales fell when incentives ended, the key question now is whether their return will be enough to reignite demand, added.