Canada April Sales Down 3.9% as Tariff Pressure Mounts
TLDR: April 2026 Canadian new-vehicle sales declined 3.9 per cent year-over-year, according to DesRosiers Automotive Consultants’ industry estimate released May 4 — extending the 2026 contraction while showing a modest improvement from March’s 8.2 per cent drop.
- Approximately 178,000 new vehicles were sold in April 2026; the year-to-date total sits at roughly 584,000 units, running below the pace needed to reach TD Economics’ 1.9-million-unit full-year forecast
- Toyota Canada recorded 26,099 total sales in April, up 5.9 per cent year-over-year — the strongest disclosed result in the market; Toyota Division electrified vehicles hit a record 17,704 units, up 38.4 per cent year-over-year, representing 68.8 per cent of Toyota brand volume
- Broader ZEV (battery electric and plug-in hybrid) demand “cooled off a tad” in April after the EVAP-driven February surge, according to Automotive News Canada; Tesla remains excluded from EVAP eligibility, limiting BEV market breadth
- New-vehicle average transaction prices fell 0.6 per cent to approximately $53,400 in Q1 2026 (DesRosiers) — ending years of sustained post-COVID price growth — while used vehicle supply reached 235,577 listings in March (CARFAX Canada), the highest level since August 2025
- Tariff-related price increases of $3,000 to $12,000 on US-assembled vehicles are expected to reach dealer lots between May and August 2026, according to Sonic Automotive’s president cited by CNBC — creating a narrowing window between current price softness and incoming cost pressure
- The federal government announced a $1.5-billion tariff relief package on May 4 targeting metal-manufacturing industries; it does not directly support vehicle retailers
Canadian new-vehicle sales totalled approximately 178,000 units in April 2026, a 3.9 per cent decline from April 2025, according to DesRosiers Automotive Consultants’ monthly industry estimate published May 4. The result extends a market contraction that has run since late 2025 but represents a meaningful improvement from March’s 8.2 per cent year-over-year drop — the sharpest single-month decline in recent years. DesRosiers characterised April’s performance as a “reasonable selling pace” given persistent economic headwinds including tariff-driven consumer uncertainty, high fuel costs, and ongoing trade policy volatility weighing on buyer sentiment.
April by the Numbers: Stabilising at a Lower Floor
Through the first four months of 2026, Canadian dealers have now moved approximately 584,000 new vehicles — 406,000 in Q1 and roughly 178,000 in April. The pace implies a full-year annualised rate of approximately 1.75 million units, well below TD Economics’ forecast of 1.9 million and below the 1.95-million-unit high recorded in 2025. For a detailed look at the Q1 dynamics that set up April’s environment, see the Q1 2026 tariff impact analysis.
Light trucks — which account for approximately 88 per cent of the Canadian new-vehicle market, according to DesRosiers — continued to dominate the sales mix as buyers prioritised SUVs and pickups over passenger cars. New-vehicle average transaction prices declined 0.6 per cent in Q1 to approximately $53,400, according to DesRosiers, ending what had been an almost uninterrupted run of price growth since 2019. Light truck prices fell by the same 0.6 per cent margin, while passenger car prices dropped more sharply at 1.4 per cent, albeit on substantially lower volume. The AutoTrader Q1 2026 Price Index, which measures average listing prices rather than transaction values, recorded a 2.7 per cent year-over-year decline to $62,830 — a directionally consistent but methodologically distinct data point.
Two factors are driving the price softness: a return to fuller inventory levels after the pandemic-era supply crunch, and a declining share of battery-electric vehicles in the sales mix. EVs typically carry higher transaction prices than comparable internal combustion engine models, so a smaller EV share reduces the fleet-wide average even when individual model prices are unchanged.
The used vehicle market reflects similar dynamics. CARFAX Canada’s April 20 market report found that used vehicle listings reached 235,577 in March 2026 — up 31.6 per cent from February and up 3.1 per cent year-over-year, the highest supply level since August 2025. The national average used vehicle listing price came in at $31,907 in March, down 2.3 per cent year-over-year. SUVs now represent 55.3 per cent of used listings (up from 51.1 per cent a year ago), while passenger cars have fallen to 27.0 per cent of inventory. EV-specific used prices declined 6.5 per cent year-over-year. Rising used supply is providing consumers with an affordability alternative but compressing wholesale values at a time when many dealers are leaning on used volume to offset new-vehicle softness.
Toyota’s Hybrid Strategy Pays Off
Toyota Canada was the most notable outperformer in April, recording total sales of 26,099 vehicles — up 5.9 per cent year-over-year against a market that fell nearly 4 per cent. The Toyota Division specifically moved 22,704 units, up 8.5 per cent. Lexus recorded 3,395 units, down 8.9 per cent, consistent with broader weakness across premium segments as Canadian counter-tariffs continue to affect higher-priced imported vehicles.
The headline figure in Toyota Canada’s April release was electrified vehicles. A record 17,704 electrified vehicles were sold in April 2026, up 38.4 per cent year-over-year. Electrified models now represent 68.8 per cent of Toyota Division volume and 61.6 per cent of Lexus volume. Toyota’s “electrified” metric includes conventional hybrid electric vehicles — the RAV4 Hybrid, Highlander Hybrid, Prius, Sienna, and Venza among others — alongside plug-in hybrids and battery electric vehicles. The large majority of this volume is HEV-based, not BEV.
This distinction matters for reading the broader market. Toyota’s April outperformance is not evidence of resurgent battery-electric demand — it is evidence of strong demand for vehicles that offer fuel efficiency without requiring charging infrastructure or accepting a full-EV price premium. With fuel costs elevated and consumer confidence fragile, traditional hybrids occupy a favourable position: perceived as financially prudent without triggering the hesitation that full battery-electric adoption still generates in many buyer segments.
Ford maintained the highest disclosed market share among major OEMs at approximately 16.1 per cent in April, consistent with its leadership in the full-size pickup segment. GM, Stellantis, Honda, and Hyundai results were not yet publicly available in full at time of writing.
ZEV Demand Softens After February’s EVAP Surge
Automotive News Canada reported that ZEV sales “cooled off a tad” in April after the EVAP-driven February surge — when ZEV share hit 10.2 per cent of total sales on 47.2 per cent year-over-year volume growth. April is the first clean read of EVAP performance without February’s pent-up demand pulling the numbers up, and the early signal is that the program’s structural ceiling is closer than the February data suggested.
The constraints on EVAP-driven demand are not new — Tesla’s US-assembled lineup remains ineligible, and the BEV price premium continues to limit market breadth, both covered in detail in the EVAP dealer guide. What April adds is the data: with the program fully active for the entire month and February’s demand backlog cleared, this is the baseline to plan against, not the February peak.
What This Means for Your Dealership
The freshest signal in April’s data is for product mix, not volume. Toyota’s 5.9 per cent gain in a market that fell nearly 4 per cent — driven by a 38.4 per cent jump in electrified sales that is overwhelmingly traditional hybrid, not battery-electric — points to where Canadian buyer preference is consolidating in this environment. Buyers want fuel efficiency without charging infrastructure, without the BEV price premium, and without the trade-policy uncertainty surrounding US-assembled EVs. Dealers should weight ordering toward HEV-rich inventory — RAV4 Hybrid, Highlander Hybrid, CR-V Hybrid, Sportage Hybrid, Escape Hybrid, Maverick Hybrid — and reset assumptions about how much of the “electrified future” Canadian buyers actually want plugged in. Dealers primarily stocked on BEVs should watch May ZEV data closely: if softening continues with EVAP fully active, the lever to pull is lease structuring and bundled charging deals, not waiting for further federal action.
The pricing window is the other near-term dynamic worth acting on. Q1 transaction prices are running below year-ago levels — a rare buying environment in Canadian retail — but Sonic Automotive’s president told CNBC in February that tariff-linked increases of $3,000 to $12,000 on US-assembled vehicles are expected to reach dealer lots between May and August. Dealers holding pre-increase inventory of US-assembled units have a defined window to communicate that timing directly to motivated buyers, rather than waiting for new price sheets to spark anxiety on the showroom floor.
On the volume side, the year-to-date annualised pace of approximately 1.75 million units sits well below TD Economics’ 1.9-million-unit forecast and 2025’s 1.95-million high. Plans built against the higher figure should be stress-tested against a 1.75-to-1.80-million scenario, with floor plan, staffing, and reconditioning capacity sized accordingly.
A note on the federal government’s $1.5-billion tariff relief package announced May 4: the $1-billion BDC loan programme and $500-million Regional Tariff Response Initiative top-up target metal-manufacturing exporters, not vehicle retailers. Dealer groups with associated parts distribution, manufacturing, or fleet operations should still confirm subsidiary eligibility with their BDC contact, but no direct retail support is on offer.