EVAP rebate drops to $4,000 on January 1, 2027

Canada's federal electric vehicle rebate is about to get smaller. The Electric Vehicle Affordability Program (EVAP) pays up to $5,000 on a new battery-electric vehicle in 2026, but that amount drops to $4,000 at midnight on January 1, 2027. The plug-in hybrid amount falls from $2,500 to $2,000 on the same date. Money is not the problem for now: according to Transport Canada, $1.87 billion was still available as of November 1, 2026. The deadline is the real constraint, and the date that counts is not the one you might expect. This update picks up where our launch-time look at EVAP funding left off.

What EVAP pays today and what changes on January 1, 2027

EVAP is a point-of-sale incentive: the discount is applied by the dealer at the time of the transaction, not claimed afterwards on a tax return. It covers new eligible electric vehicles bought, or leased for 12 months or more, between February 16, 2026 and March 31, 2031, or until the funding runs out, whichever comes first. According to Transport Canada's Q&A, purchases and leases of 48 months or more qualify for the full amount, while leases of 12 to 47 months qualify for a reduced amount; the maximum per vehicle is on the official vehicle list.

The amounts for 2026 are:

• Up to $5,000 for a battery-electric or hydrogen fuel cell vehicle.
• Up to $2,500 for a plug-in hybrid.

At midnight on January 1, 2027, those amounts fall to $4,000 and $2,000. That is $1,000 less for a battery-electric vehicle and $500 less for a plug-in hybrid. The amount is tied to the year of submission: a submission made in 2026 keeps the 2026 amount (subject to the 90-day delivery rule), and submitting before December 31 is the safe route. The program itself continues to 2031 if the money lasts; only the amount per vehicle changes.

The date that counts is the dealer's submission date

This is the detail that catches buyers out. Transport Canada ties the amount to the date the dealer submits the eligibility assessment, not to the date you sign or register the vehicle. There is a limit, though: according to Transport Canada's Q&A, the validated eligibility assessment is valid for 90 days. The 2026 amount therefore holds only if the vehicle is delivered within 90 days of a submission made in 2026. The two official examples show how it works. In the first, the dealer submits the assessment (the pre-approval) on December 2, 2026 and the vehicle is delivered on February 21, 2027; the 2026 level (up to $5,000 for a battery-electric vehicle and up to $2,500 for a plug-in hybrid) applies, because the assessment was submitted in 2026 and is valid for 90 days. In the second, the vehicle is delivered on November 26, 2026 but the assessment is only submitted on January 7, 2027; the reduced 2027 level applies, even though the vehicle was delivered in 2026.

That shifts the risk onto the calendar of the dealership. Year-end is a busy time, deliveries are often late, and the dealer submits through an online portal. Transport Canada has also announced a planned service interruption of the EVAP dealer portal on Saturday, November 7, 2026, from 9 AM to 1 PM Eastern time. During that window dealers cannot submit anything. It is a short interruption and it falls well before the year-end deadline, but it is a reminder that a submission can be delayed by something other than your own paperwork.

$1.87 billion left: how much room is there?

The program was funded with $2.275 billion over five years. As of November 1, 2026, $1.87 billion remains, according to the EVAP page of Transport Canada (last modified November 4, 2026). The difference between the two figures is roughly 18% of the total, about $405 million less than the starting envelope (our own calculation from the two official figures).

What does that tell you? Mostly that there is no sign of an imminent shortage, and that the funds-run-out clause is not what should drive your calendar this year. The January 1 drop is a fixed date; the exhaustion of the fund is not. If you are comparing offers, the $1,000 difference is the concrete number to plan around.

What to ask your dealer

If you are buying or leasing a new EV before the end of the year, these questions protect you:

1. 1On what date will you submit the EVAP eligibility assessment? Ask for it in writing, or at least by email, and ask what happens if the submission slips into January. Also remember that, according to Transport Canada's Q&A, the validated assessment is valid for 90 days: ask for the expected delivery date, which must fall inside that window for you to keep the 2026 amount.
2. 2What is the final transaction value, fees included? The cap is $50,000 or less on the final transaction value, not on the sticker price. There is no cap for a vehicle made in Canada, and there are no separate higher limits for SUVs or seven-seaters.
3. 3Is the exact model and trim on the official list? Check it yourself on the Transport Canada vehicle list rather than relying on a verbal assurance.
4. 4Is the rebate applied on the invoice? Because it is a point-of-sale incentive, it should appear as a line on the contract.

Cost of ownership matters as much as the rebate. A $4,000 or $5,000 incentive can be offset by a higher insurance premium, so get quotes before you sign rather than after.

Chinese-made EVs do not qualify, at any price

Only EVs made in Canada or in a country that has a free-trade agreement with Canada are eligible for EVAP. China has no such agreement with Canada, so a Chinese-built EV is not eligible, whatever its price and whatever the brand. That includes Tesla: the Model 3 sold in Canada is imported under the Chinese-EV quota. For Tesla, the indicative list we checked contained only the Model Y RWD-B. Our article on why Chinese EVs are not eligible for EVAP explains the rule in detail.

For Chinese brands that are still preparing a Canadian entry, such as BYD, Chery or Geely, the January 1 date changes nothing. None has confirmed a model, price or exact on-sale date in Canada; Geely has said it targets 2027 (Oct. 9, 2026 press release). A model built in China would not qualify for the rebate in any case. If you are waiting for one of them, do not build your 2026 budget around EVAP.

The photo illustrating this article shows a Hyundai Ioniq 5 at the 2023 Montreal International Auto Show. It is only an example of an EV at a Canadian show: it says nothing about that model's eligibility or price, which you must check on the official list.

Quebec: two cuts land on the same day

In Quebec, the picture is tighter still. The Roulez vert program offers up to $2,000 on a new electric vehicle in 2026, but only for models on its closed eligible list, and it ends on December 31, 2026. For Roulez vert, the registration date is what counts, not the order date or the deposit. Our Roulez vert guide covers the details.

A Quebec buyer therefore faces two changes on January 1, 2027: the federal rebate drops by $1,000 for a battery-electric vehicle, and the provincial rebate is gone. Anyone who can take delivery, and have the vehicle registered and the submission made, in 2026 avoids both. The two programs use different dates (registration for Quebec, dealer submission for the federal rebate), so ask your dealer to confirm both timelines.

Quick countdown

• November 7, 2026: EVAP dealer portal interrupted from 9 AM to 1 PM ET.
• December 31, 2026: last day to submit an assessment at the $5,000 and $2,500 level (delivery within 90 days), and the last day of Roulez vert in Quebec.
• January 1, 2027, midnight: federal amounts fall to $4,000 and $2,000.

FAQ

How much does the federal EV rebate drop on January 1, 2027?

The EVAP amount for a battery-electric or hydrogen vehicle falls from $5,000 to $4,000, and the amount for a plug-in hybrid falls from $2,500 to $2,000. The change takes effect at midnight on January 1, 2027.

Which date decides the amount: delivery or the dealer's submission?

The date the dealer submits the eligibility assessment, with one limit: according to Transport Canada's Q&A, the validated assessment is valid for 90 days. A submission made in 2026 gives the 2026 amount if the vehicle is delivered within 90 days (official example: submitted December 2, 2026, delivered February 21, 2027). A submission made in January 2027 gives the 2027 amount, even if the vehicle was delivered in 2026. Ask your dealer when the submission will be made and when delivery is expected.

How much money is left in the EVAP fund?

Transport Canada reported $1.87 billion remaining as of November 1, 2026, out of $2.275 billion over five years. The program runs to March 31, 2031 or until the funds run out.

Is there a price cap to qualify?

Yes. The final transaction value must be $50,000 or less, unless the vehicle is made in Canada, in which case there is no cap. There are no separate caps for SUVs or seven-seaters.

Can I get EVAP on a Chinese-made EV?

No. Only EVs made in Canada or in a country with a free-trade agreement with Canada qualify. A Chinese-built EV is ineligible at any price, Tesla included.

What happens to Roulez vert in Quebec?

It gives up to $2,000 on models on its closed eligible list and ends on December 31, 2026. The registration date is what counts.