Tesla sales drop – but not attributed to Elon Musk
Tesla sales in Canada plunged over the last month, but it wasn’t because electric vehicle buyers are recoiling from the brand founded by Elon Musk.
While loud voices on social media seem to indicate that consumers are turning away from Tesla in protest after Musk took up a prominent role in U.S. President Donald Trump’s new administration, which has aggressively targeted both climate action and Canada, the numbers do not reflect this.
Nationwide sales of Teslas were down 70 per cent between December 2024 and January 2025. Meanwhile, sales of all zero-emission vehicles (ZEVs), which include both battery-powered and plug-in hybrids, were down even more — 79 per cent, according to S&P Global, which provided the Star with a preview of ZEV sales numbers that have not yet been made public.
Experts say the dramatic drop is due to the end of government subsidy programs and a hike in EV prices, which has made EVs as much as $21,000 more expensive than they were only seven weeks ago.
“Consumers in Canada are price sensitive and with these changes to the federal and provincial rebates, it’s negatively impacting what vehicles customers are looking to buy,” said James Hearn, S&P Global Mobility’s associate director of market reporting.
Unlike politics, the rise in upfront cost has hit all makes of ZEVs. Sales of Chevrolet ZEVs were down 65 per cent and Hyundai ZEVs were down 30 per cent month-over-month, the data show.
The federal $5,000 EV rebate ran out of money in January and Quebec, where nearly half of all ZEVs are sold, ended its $7,000 rebate at the end of last year.
“We’re seeing extreme market disruption right now,” said Brian Kingston, president of the Canadian Vehicle Manufacturers’ Association. “The incentives have a huge influence on the market and their abrupt stoppage means that sales of EVs have effectively stalled.”
Daniel Breton, president of Electric Mobility Canada, a group that advocates for EVs, said the Quebec market dominates in Canada and what happens there has ripple effects across the country.
The future of government EV rebates is in doubt, he said, with some parties pledging to renew the federal program and Quebec promising a less generous $4,000 rebate that will become available April 1.
“A lot of people were pushing to get their vehicles before the end of the year,” Breton said. “Now they’re postponing their purchases till April.”
The drop in sales between December and January may have been big, but it wasn’t enough to buck the larger trend of burgeoning growth in the EV sector. Sales grew so much in 2024 that January 2025 ZEV sales were still 27 per cent higher than they were a year prior.
Tesla sales, for example, rose more than 300 per cent in 2024, and remained about 30 per cent higher after the drop in January than they were the year before.
Globally, ZEV sales are growing rapidly, and while government incentives can create short-term swings in the local market, the overall upward trend is clear, Hearn said.
In 2018, when Doug Ford’s government cancelled the EV subsidy in Ontario, sales dropped immediately and did not recover for three years. At the same time, however, sales grew so quickly in British Columbia and Quebec that overall sales of ZEVs in Canada continued to grow. (Discounting the pandemic lockdown year of 2020, when sales of all cars and trucks fell.)
Similarly, when the federal EV rebate was announced in 2019, sales tanked for several months until the subsidy became available, Breton said.
Tesla’s sales numbers are still growing, but its control of the ZEV market has been in decline for some time — a trend that predates Musk’s association with Trump.
Thanks largely to its early entrance into the EV market, Tesla has long held a dominant position, selling more battery electric vehicles than all other brands combined. But as new models entered the market, Tesla’s market share has eroded.
According to S&P Global’s numbers, as recently as the end of 2022, Tesla controlled more than 40 per cent of the ZEV market. But in the last two years, its share has eroded by more than half, sitting at only 17.5 per cent in the last quarter of 2024. (These numbers include sales of plug-in hybrids; Tesla commands a larger portion of the fully electric vehicle market.)
Tesla sales in Europe have not held up as well, and 2024 was the first year that the company reported a global annual decline in deliveries. Tesla sales in France were 63 per cent lower in January 2025 than they were the previous year. They dropped 59.5 per cent in Germany.
The company, which only produces EVs, has faced stiffer competition in Europe, where Chinese EVs face lower tariffs than they do in North America.
Meanwhile, other car manufacturers have announced dozens of new ZEV models, with many cheaper vehicles set to become available in the coming months.
This, more than politics or rebates, bodes well for the long-term future of EV sales, said Breton.
“The trend is still solid,” he said. “It’s going to be much easier for everyday Canadians to buy an electric car.”
This article was first reported by The Star
