Shifting gears on EVs

TECH

Automakers push back on EV mandate

What happened: Automakers are urging Prime Minister Carney to cancel Canada’s electric vehicle (EV) sales mandate, citing weak consumer demand and economic pressures from U.S. tariffs.

• Compounding the challenge, Canada’s federal EV rebate ran out of funding earlier this year and is currently on hold

The context: Canada’s Electric Vehicle Availability Standard, introduced in 2022, requires 20% of new vehicle sales to be zero-emissions by 2026 and 100% by 2035.

• Carmakers either need to sell more EVs or build charging stations to meet the requirements - or face paying fines.

• Federal and provincial rebates encourage consumers to buy EVs; the sales mandate ensures automakers invest in building EVs and making them available

Canada’s EV policies are yielding results - EV sales steadily increased, going from ~6% in 2022 to just over 18% in Q4 of 2024 - albeit slower than the industry expected.

Why it matters: Cutting transport emissions is key to meeting Canada’s climate targets - it’s the second-biggest source of carbon pollution, making up 23% of national emissions. In fact, there’s no scenario where Canada’s meets it climate targets without switching to zero-emission vehicles.

At the same time, EVs are a strategic industrial opportunity as Canada looks to build out a domestic EV value chain spanning mining and processing, battery manufacturing, and auto assembly.

The outlook: Automakers could get some breathing room given the trade ware with the U.S. while still charting a course for long-term adoption. Some outcomes we might see:

• Push back target dates - e.g. 2030 becomes 2035

• Add more flexibility for automakers to comply - e.g. charging infrastructure

• New incentive packages to make EVs more affordable

A mix of flexibility and more incentives could be in play, as Carney has said he prefers carrot over sticks when it comes to climate policy.

The bottom line: Carney will need to balance Canada’s climate commitments and industrial policy with the economic pressures facing the sector. The feds say that the rebates will return, but without bold policy signals and real investment, Canada risks falling behind on both emissions reductions and the future of its auto sector.

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CLIMATE CAPITAL

⚡️ Boralex (Kingsey Falls, QC) closed a $250 million loan from La Caisse and Fondaction to finance its portfolio of renewable energy projects. Boralex aims to expand its global footprint in wind, solar, and storage projects with this working capital.

🏭️ The federal government will invest $21.5 million to support five carbon capture projects in Alberta. Projects include OCCAM’s carbon capture system for diesel engines, mapping underground reservoirs, and a CO2 pipeline.

🌊 The Carbon to Sea Initiative will invest $4 million to support research into ocean-based carbon removal across Canada, focusing on Ocean Alkalinity Enhancement.

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ECOSYSTEM VIEW

Ideas & Insights

We’re highlighting perspectives across our climate tech community - essays, insights, research and more. Got something to share? Let me know!

🥩 Lessons learned from alt-proteins 1.0: Emily Farrar, co-founder of cultivated fat startup Genuine Taste joined us on the podcast. We talked about why fat is the key to adopting plant-based meat, the lessons they’ve taken from the first wave of alt-protein companies - and how they’re building their business differently.

Listen on Spotify or Apple Podcasts

💻️ 50 Climate Tech Pitch Decks: Our friends at NatureTech Memos put together this excellent compilation of pitch decks from 50 climate tech leaders.

📈 Canada’s Carbon Edge: This special episode of The Carbon Curve dives deep into Canada’s potential to lead on carbon removal, hosted by Carbon Removal Canada’s Na’im Merchant.

NEWS

📡 Signals & Currents

🏭️ Steel and aluminum tariffs squeeze Canada’s producers - Rio Tinto is in discussions with the feds for financial aid due to U.S. aluminum and steel tariffs. Canadian producers have been hit hard by 50% tariffs, as they export the majority of products to the U.S. [G&M]

📈 Google’s data centres double energy use - Energy consumption doubled in just four years, despite major efficiency gains and investments in clean power. [TechCrunch]

🌱 Climeworks locks in biggest CDR deal of 2025 - The carbon removal leader raised US$162 million, signalling investor confidence in established players and a diversified business model. [ClimeWorks]

💰 Trillion-dollar carbon markets ahead - Wood Mackenzie projects trillion dollar growth in global carbon markets driven by rising demand, evolving standards, and strategic corporate deals. [WoodMac]

🔋 Tesla’s storage stumble - Tesla’s battery storage business, a rare bright spot in recent quarters, saw its first dip - installing 9.6 GWh in Q2, down 0.8 GWh - as it gets sucked into the company’s wider struggles. [TechCrunch]

🧪 EU bets big on biotech - The EU earmarked €350 million to position itself as the global hub for life sciences by 2030. Fermentation and cultivated meats will benefit from faster regulatory pathways. [GreenQueen]

🌧️ Texas faces “worst-case” floods after climate monitoring cuts - Flash floods killed at least 90 people in Texas as the U.S. cuts weather service funding. [The Hill]

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