Canada’s electric vehicle mandate faces uncertainty as Prime Minister Mark Carney recently announced a pause on the national mandate known as the electric vehicle availability standard. While the Conservatives have been advocating for the policy’s removal, Carney has not committed to that decision but hinted at the possibility of eliminating the Trudeau-era climate policy.
The mandate required Canadian and foreign automakers selling passenger cars, SUVs, and pickup trucks in Canada to meet incremental zero-emission vehicle sales targets, starting at 20% in 2026 and reaching 100% by 2035. This was aimed at ensuring a variety of zero-emission vehicles, including EVs, fuel cell engines, and plug-in hybrid electric vehicles, are accessible to consumers.
Carney stated that the government is conducting a 60-day review of the mandate and may make adjustments or entirely eliminate it, similar to the consumer carbon tax. Automakers and the Conservatives have raised concerns over meeting the targets due to sluggish EV demand and trade disputes.
The mandate does not ban gas-powered vehicles, allowing drivers to continue using traditional vehicles. Even after the full implementation in 2035, car manufacturers can still sell gas-powered vehicles, but they must be plug-in hybrids with a minimum electric range of 80 kilometers.
If automakers fail to meet sales targets, they have options to comply, such as making up the shortfall in subsequent years or earning credits for EVs sold in earlier model years. Deploying charging infrastructure can also earn automakers credits under the regulations, potentially leading to the $20,000 tax claim by Conservative Leader Pierre Poilievre.
While details on the actual cost of credits remain confidential, industry experts suggest that credit prices could decrease with an abundance of credits, as seen in other jurisdictions with similar mandates. This could lead to potential deals and negotiations among automakers to meet the mandate requirements efficiently.