Saturday, December 2, 2023
News ZEV Rebates Influence Green Vehicle MSRPs: An Insight into Pricing Dynamics

ZEV Rebates Influence Green Vehicle MSRPs: An Insight into Pricing Dynamics

Industry professionals suggest that Zero-Emission Vehicle (ZEV) rebates might be impacting the pricing of electric vehicles, with manufacturers integrating these incentives into their pricing strategies.


·      ZEV incentives, designed to promote electric vehicle adoption, might inadvertently elevate EV prices.

·      Examples like the Chevrolet Bolt and Kia EV6 highlight pricing changes in response to incentive alterations.

·      Luxury car segment reveals potential counterpoints in rebate-induced pricing dynamics.


According to a report from ABC News, federal and provincial rebates meant to encourage Canadians to switch to electric vehicles (EVs) might have unintended consequences on vehicle pricing. Instead of making EVs more affordable for consumers, manufacturers seem to be the primary beneficiaries. Sam Fiorani, Vice-President of Global Vehicle Forecasting at AutoForecast Solutions, suggests that these incentives inadvertently push EV prices up. Rather than adhering to free-market pricing, manufacturers may be incorporating the value of these rebates, thereby setting post-incentive prices that remain appealing to consumers.

2022 Chevrolet Bolt EUV

A clear illustration of this dynamic is the U.S. pricing of the Chevrolet Bolt. Initially, when a $7,500 incentive was available, the vehicle’s price was approximately $7,000 higher than it would have been without the incentive. When Chevrolet lost these incentives, the Bolt’s price dropped correspondingly.

2023 Chevrolet Bolt EUV

In Canada, similar adjustments in EV pricing, influenced by changes in incentive programs, are evident. The Kia EV6 hatchback, for instance, saw a price hike shortly after the federal Incentives for Zero-Emission Vehicles (iZEV) program increased its base-model cap. Kia Canada attributed this to “current market realities,” without explicitly acknowledging the role of iZEV changes.

2023 Chevrolet Bolt EUV Review: The Year To Shine

Dan Ilika, from, believes several brands are strategizing their pricing based on iZEV rebate eligibility. This seems evident with many vehicles, including Tesla’s models, being priced just below the incentive thresholds.

2023 Kia EV6 North American Utility Vehicle of the Year Limited Edition | Photo: Kia

While rebates appear to increase mainstream EV prices, the luxury segment shows different trends. The Mercedes-Benz EQB 250 compact crossover, priced at $59,990, is expected to be eligible for Ottawa’s incentive. Bart Herring from Mercedes-Benz Canada mentioned that they considered these rebates when determining the new model’s price, aiming to make their brand more accessible.

Mercedes-Benz EQB 350 4MATIC | Photo : Mercedes-Benz

In conclusion, while rebates aim to boost EV adoption, their impact on vehicle pricing is multifaceted. Manufacturers and consumers must navigate this evolving landscape to truly benefit from the transition to green vehicles.

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