Canada’s auto market closed 2025 with modest headline growth – but beneath the surface, the year-end numbers from British Columbia and across the country point to a market increasingly shaped by policy shifts, affordability pressures, and growing consumer hesitation.
DesRosiers Automotive Consultants report that on a national basis, new light vehicle sales reached 1.90 million units in 2025, up two per cent from 2024. On paper, that suggests stability. In reality, momentum slowed down significantly as the year progressed. December sales fell 7.3 per cent year over year, with just 126,000 vehicles sold, underscoring a softening market heading into 2026.
That late-year weakness was especially evident in Canada’s largest provincial markets -including BC.
British Columbia finished 2025 with new light vehicle sales down 0.6 per cent compared to the year before – an outcome that stands out given the province’s historic strength and its leadership in zero-emission vehicle adoption.
For years, BC has been Canada’s EV bellwether, but in 2025 that model showed strain. After sustained growth, EV sales momentum slowed and then reversed. While complete year-end EV data is not yet available, the information available at this point, reflects a clear shift:
- Q2 2025: ZEV registrations in B.C. declined 27.6 per cent year over year
- Q3 2025: Registrations fell a further 35.6 per cent, with just 8,256 units sold, placing B.C. behind both Quebec and Ontario
The reasons are well understood. The pause of the CleanBC Go Electric Vehicle Rebate Program in May 2025, combined with the end of the federal iZEV incentive, removed key affordability supports almost simultaneously.
At the same time, BC’s so-called luxury vehicle tax threshold of $55,000 has not been updated in years and no longer reflects today’s market, where the average price of a new vehicle now exceeds $66,000. This tax has effectively become a vehicle purchase tax on working families,
While other provinces posted overall sales gains in 2025, BC joined Quebec as one of only two provinces to record a full-year decline – an important signal given their shared reliance on incentive-driven EV adoption.
Nationally, 2025 exposed a growing disconnect between policy ambition and consumer readiness. While total annual sales in Canada increased slightly, much of the year’s growth was front-loaded, with widespread weakness emerging in the final quarter—particularly in large markets such as BC, Ontario, Alberta, and Quebec.
The lesson from 2025 is not that electrification is failing – but that pace matters, and so does policy certainty. Incentives and affordability supports remain critical, especially in high-cost provinces like British Columbia. When those supports are paused or withdrawn abruptly, the market responds just as quickly.
As Canada enters 2026, the auto sector is sending a clear message. Stable growth will depend not just on mandates and targets, but on predictable, coordinated policies that align with consumer reality. The data from BC and across Canada suggests the margin for error is narrowing.
Blair Qualey is President and CEO of the New Car Dealers Association of BC. He can be reached at [email protected]
