With the Canadian government reinstating federal electric-vehicle (EV) incentives, demand for EVs and related electrification infrastructure could get a fresh boost in 2026. Ottawa’s renewed rebates — offering up to $5,000 on battery electric vehicles and up to $2,500 for plug-in hybrids — may accelerate fleet and transit spending while pulling forward consumer purchases that stalled after prior programs expired. These incentives are designed to lower the effective cost of EVs and stimulate broader adoption, which could ripple through the industrial and manufacturing supply chain.

For investors seeking exposure to this trend with dividend income and long-term potential, NFI Group (TSX: NFI) stands out as a compelling pick. NFI is not a traditional EV automaker — it specializes in manufacturing buses and coaches, including zero-emission transit vehicles, through well-known brands like New Flyer and Motor Coach Industries. Electrification of public transportation is gaining traction as cities and governments pursue cleaner fleets, and a portion of NFI’s sizable backlog is tied to zero-emission buses, giving the company visibility into future production.

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While NFI has faced operational headwinds in the past — including production challenges linked to battery recalls — recent adjustments in supplier partnerships and a solid backlog suggest the business is stabilizing. The company also posted stronger adjusted earnings and EBITDA growth year-over-year, indicating improving margins and execution. Its liquidity position provides a cushion while it scales deliveries and transitions to higher-margin electrified products.

It’s important to be realistic about risks: NFI’s stock has been volatile, and exchange-manufacturing or delivery delays, municipal budget constraints, or further warranty costs could impact profitability. Moreover, NFI isn’t a classic “dividend machine” — its appeal lies more in participation in the electrification ecosystem with the potential for eventual yield growth as earnings improve.

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Bottom line: For Canadian investors looking to blend dividend-oriented exposure with exposure to the ongoing electrification theme supported by government incentives, NFI Group (TSX: NFI) offers a mix of stable base cash flows and growth tied to EV fleet demand. Its unique position in electric bus manufacturing and diversified revenue could make it a core holding for a long-term, income-focused portfolio.