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Electric Vehicles & Battery Manufacturing

Full Depreciation for Business Investment in Zero-Emission Vehicles

Nora Nahornick
Published on October 1, 2020 PDF(opens a new window)

The government is introducing a 100% depreciation rate in the year of purchase for eligible zero-emission vehicles (ZEVs) purchased by a business. This policy will provide full (i.e. 100%) depreciation to used on-road battery electric, plug-in hybrid or hydrogen fuel cell vehicles. The 100% rate will also apply to new and used automotive equipment and vehicles that are fully electric, or hydrogen powered and that are used for the purpose of rail, air, marine or off-road transportation.

The 100% rate will apply to eligible vehicles purchased on or after March 2, 2020 and will expire on December 31, 2027 with a gradual phase out beginning January 1, 2024. Specifically, a 75% rate will apply to eligible vehicles purchased between January 1, 2024 and December 31, 2025 and a 55% rate will apply to purchases made between January 1, 2026 and December 31, 2027.

The estimated net cost of the full tax-write off for businesses investing in eligible zero-emission vehicles is $94 million between 2020-21 and 2024-25.

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