New vehicle sales in Canada experienced a downturn in January 2026, according to recent data released by Statistics Canada. The numbers reveal a 5.6% decrease in overall sales compared to January 2025, with 114,415 new motor vehicles sold. In dollar terms, this represents a 6.1% decrease.
Zero-emission vehicles (ZEVs), which include battery electric and plug-in hybrid vehicles, saw the most substantial decline. Sales of new ZEVs fell by 39.3% compared to the same period last year, with 8,826 units sold. This contrasts with the overall trend in 2025, where ZEVs accounted for 8.7% of all new motor vehicles sold in Canada. A previous report indicated that in December 2025, ZEV sales were down 35.7% from the prior year.
Industry analysts suggest that changes to federal and provincial ZEV incentive programs may have contributed to the decline. The suspension of the federal Incentives for Zero-Emission Vehicles program in January 2025, coupled with reduced rebates under Quebec's Roulez Vert program, likely dampened consumer demand. The Canadian automotive market had been on a growth trajectory, with sales increasing by 2.1% in 2025. However, January's numbers suggest a potential shift in consumer behavior.
While passenger car sales also saw a significant decrease of 18.2%, new truck sales experienced a smaller decline of 3.9%. The automotive sector is a key contributor to the Canadian economy, with Canada assembling around 1.4 million vehicles annually and supported by a network of nearly 700 parts suppliers. The January sales figures may prompt industry stakeholders and policymakers to re-evaluate strategies to support the growth of ZEV adoption in Canada.
