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Electrical car (EV) incentives simply made a shock comeback, and Canadian traders ought to concentrate. Rebates can flip a “perhaps later” buy right into a signed deal, and that may pull charging, manufacturing, and fleet spending ahead. That demand ripple doesn’t simply assist carmakers. It could actually elevate the broader provide chain, together with Canadian producers linked to electrified transit.
On Feb. 5, 2026, Ottawa introduced a brand new Electrical Automobile Affordability Program with $2.3 billion in funding. It mentioned Canadians can obtain as much as $5,000 for battery-electric or gas cell electrical automobiles and as much as $2,500 for plug-in hybrids, with a $50,000 value cap for plug-in hybrids. It additionally mentioned the cap won’t apply to Canadian-made EVs and plug-in hybrids, and incentives will solely apply to automobiles produced in international locations with a free commerce settlement. So, how can traders participate?
NFI
Whereas not a daily EV inventory, NFI Group (TSX:NFI) builds buses and coaches, plus elements and help, by manufacturers like New Flyer, Motor Coach Industries, and Alexander Dennis. It sits in a sensible nook of electrification: public transit, shuttles, and fleet refresh cycles. The EV inventory has been unstable, although after plunging in share value, the EV inventory has surged 11% yr up to now and 52% within the final yr.
Operationally, the previous yr blended actual progress with a really public headache. On the progress aspect, NFI improved deliveries and pricing and stored a backlog that helps manufacturing visibility. On the finish of its third quarter of 2025, it reported a backlog of $13.2 billion, and it mentioned zero-emission buses represented 35.1% of whole backlog on an equivalent-unit foundation.
Earnings help
Now for the numbers that matter. Within the third quarter ended Sept. 28, 2025, NFI reported income of $879.9 million, up from $711.3 million a yr earlier. It posted a web lack of $140.9 million, or $1.18 per share, largely as a result of it recorded a $229.9 million guarantee provision tied to a battery recall.
Right here is the half that makes the loss really feel extra like a detour than a useless finish. NFI additionally reported adjusted web earnings of $12.1 million, or $0.10 per share, and adjusted earnings earlier than curiosity, taxes, depreciation, and amortization of $80.9 million, up 52.1% yr over yr. It reported liquidity of $386.0 million at quarter-end, which supplies it extra respiration room whereas it really works by manufacturing and repair points.
Wanting forward
Administration additionally tried to de-risk the EV aspect of the story. It mentioned it had shifted its main battery provide for brand spanking new New Flyer battery-electric buses to a unique provider that has offered battery programs since 2023. It additionally mentioned it expects enchancment into 2026 and past because it executes backlog, lifts manufacturing, and leans on higher-margin items and aftermarket development. The chance is that one other disruption, tighter municipal budgets, or slower funding approvals can delay deliveries and push money circulation round, which may whipsaw the share value.
With a market capitalization of round $2 billion, it may well work for growth-focused traders who can deal with bumps and who need publicity to electrification past passenger vehicles. I might purchase it for the potential earnings restoration, not for earnings in the present day, and I might measurement it like a spicy aspect dish, not the entire meal. If the recall prices fade and margins preserve bettering, the EV inventory has room to shock. If not, it may well punish impatience quick.
Backside line
Yet one more factor: this incentive headline doesn’t assure a straight line up. NFI wins when fleets place orders and when it delivers on schedule. Watch the subsequent outcomes for margin progress and for any contemporary guarantee surprises. If you’d like a clear dividend machine, that is the flawed instrument. If you’d like a turnaround tied to electrification demand, it may well match inside a diversified plan.