- Climate Tech Canada
- Posts
- Automakers push back on EV mandate
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 - or face 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.
Get up to speed on climate
Subscribe below to get the best climate news, events, job postings for Canadians.
Reply