04.18.2025

Navigating Canada’s EV Incentives: Implications for Residual Values and Remarketing Strategies

As Canada’s electric vehicle (EV) marketplace matures, automotive professionals find themselves facing significant shifts—especially as the regulatory environment around EV incentives continues to evolve. For remarketing leaders, risk managers, and product strategists, understanding how changes in government support intersect with residual values and remarketing strategies has never been more essential to long-term profitability.

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The New Reality: Declining Federal Incentives, Patchwork Provincial Support

For several years, the federal Incentives for Zero-Emission Vehicles (iZEV) program boosted EV adoption with up to $5,000 in rebates. However, as of January 2025, that funding is officially paused, and no new iZEV incentives are being issued. The emphasis has now shifted back to provincial programs, each with its own eligibility requirements, funding pools, and expiry timelines. For the automotive industry, this means:

  • Uneven Buyer Demand: With federal dollars gone, the local impact of provincial programs is amplified, leading to divergent demand by region.
  • Price Sensitivity: Manufacturers’ temporary incentives may buffer short-term effects, but the looming reduction in support is already impacting buyer decision cycles and—crucially—second owner demand.

Provincial Program Highlights for 2025

  • Quebec: Continues to lead with $4,000 rebates on new EVs below $65,000 MSRP and $2,000 for used units but begins levying annual registration fees in 2027.
  • British Columbia: Prioritizes infrastructure with rebates for home and multi-unit charger installation rather than direct vehicle subsidies.
  • Business Incentives: Federal write-offs of up to 75% of EV costs (up to $61,000) for commercial buyers remain, but only through the 2025 tax year.

Implications for Residual Values: Data and Direction

We have rigorously tracked EV values as incentives ebb and flow, and our analytics are clear: government support exerts real pressure on both new EV uptake and downstream resale performance.

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  • Average 4-Year EV Residuals: 58.45% (notably under gas-powered vehicles, which hold 63.53%)
  • Year-over-Year Decline: EV residuals dropped 5.6% compared to a 3.9% drop for similar ICE vehicles
  • Segment Standouts:
    • EV Car <$55K: 55.75% (Nissan Leaf best in segment)
    • EV SUV <$60K: 58.35% (Kia EV9 best in segment)
    • Luxury EV Car: 61.20% (Porsche Taycan best in segment)

What’s driving these numbers? The answer goes beyond simple supply and demand. Battery health, charging infrastructure accessibility, and consumer trust in vehicle longevity are all increasingly important valuation levers.

How Incentives Directly Affect Remarketing Strategies

With incentive-driven buyer surges waning, we’re seeing sophisticated remarketers pivot to more data-informed, multi-channel approaches. Let’s break down the key strategies that can help Canadian automotive professionals stay ahead of the curve in this dynamic market:

1. Go Digital and Upstream—Speed Matters

  • Digital wholesale: The most successful remarketers are leveraging live market data to list vehicles sooner—even before lease-end—using intelligent VIN-matching and active price optimization.
  • Reduced cycle times: Digital remarketing has cut EV wholesaling cycles to as little as 11 days (from the industry average of 34 days).
  • Our Cherry application exemplifies how integrating real-time data and mobile accessibility speeds up inventory decisions and creates targeted, profitable deals.

2. Battery Health: Transparency is the New Trust

  • Battery State of Health (SOH) certification is one of the fastest-growing drivers of EV residual value, boosting returns by up to 12–15% over uncertified units.
  • Customers consistently express willingness to pay a premium for pre-owned EVs with clear battery life documentation and transferable warranties.
  • Those equipped to provide battery health clarity have an outsized edge in resale and trade-in value estimation. Tools like ValuEngine support this by unlocking deep portfolio insights and risk management across large inventories.

3. Multi-Channel, Multi-Buyer Approach

  • Direct-to-Consumer: Certified pre-owned EV programs facilitate faster sales cycles and typically secure higher prices. Setting up educational resources around EV ownership can further drive trust and conversion rates.
  • Dealer Partnerships: The dealers best positioned for EV remarketing success are those that can translate complex value factors (battery degradation rates, charging history, anticipated lifetime fuel cost savings) into clear sales messages for retail buyers.
  • Recycling/Repurposing: As battery recycling and second-life programs mature, there are additional pathways to monetize vehicles that may not meet retail-grade standards but still offer substantial parts or energy storage value.

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4. Targeted Reconditioning Maximizes Value

  • Focused reconditioning is critical—investments in fast-charging port repairs or infotainment software updates consistently yield above-average value gains at auction and direct sale.
  • Our analytics indicate that as many as 93% of used-EV buyers will pay a premium for up-to-date software and battery life certifications. Strategic reconditioning means anticipating what matters most to these informed, tech-savvy customers.

What the Road Ahead Looks Like: Key Trends & Actionable Insights

  • Provincial dominance: With federal incentives paused, up to 68% of future EV purchase decisions will hinge on local policy, affecting where to target remarketing efforts.
  • Risks of declining residuals: Absent battery breakthroughs or renewed incentives, the largest residual drops may occur among non-luxury EVs, some threatening to drop below 50% by 2027. This underlines the importance of up-to-date portfolio analysis and flexibility in forecasting.
  • Shifting consumer patterns: As used-EV supplies swell, a growing subset of shoppers are opting to return to internal combustion vehicles. For remarketers, the opportunity is to identify which EV segments retain strong loyalty and which are vulnerable to churn—and adjust pricing and reconditioning strategies accordingly.

Pioneering the Future with Data-Driven Confidence

For those of us navigating the Canadian EV remarketing ecosystem, the landscape is more complex—but also more promising for those equipped with the right insights and tools. Precise, timely vehicle valuations, battery transparency protocols, and the adoption of multi-channel remarketing platforms aren’t just best practices; they will be the differentiators in a post-incentive marketplace.

At Canadian Black Book, we’re committed to helping automotive professionals not only keep pace with these changes but also shape strategies that drive lasting value. With our suite of valuation, analytics, and remarketing tools—including Cherry, ValuEngine, and industry-leading custom reporting—remarketing leaders and risk managers can reduce uncertainty, maximize gains, and fuel Canada’s electric transition with confidence.

For more insights, or to explore how you can turn volatility into opportunity in Canada’s evolving EV marketplace, connect with us today.

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