Changes in Canada’s Electric Vehicle Policy
It’s not only in the US that the federal government is stepping back from previous commitments on electric vehicles. Last week, Canadian Prime Minister Mark Carney announced that the government will no longer implement a mandate requiring 20% of all new cars sold in Canada by next year to be electric. Unsurprisingly, this news was welcomed with pleasure by General Motors.
Automaker’s Position
During a recent speech at an electric vehicle conference in Vancouver, the president of GM Canada, Christian Aquilina, noted that the transition to electric vehicles will be unstable, and policy must take consumer demand into account.
When it comes to the adoption of electric vehicles, it will not be a linear process. There will be a lot of noise in the system, making the adoption a bit more unstable than the idealistic adoption curve that a mandate imposes.
We want the electric vehicle policy in this country to reflect the reality of consumer demand more, rather than being an imposed outcome.
Canada’s Plans and Their Revision
Canada’s initial plan envisaged a gradual increase in electric vehicle sales leading up to 2035, when all passenger cars were to be either plug-in hybrids or fully electric. By canceling the mandate for 2026, the Carney government has shown a shift in approach, although it has also launched a 60-day review of the country’s broader electric vehicle program. Internal government documents indicate that annual sales targets could still be changed.
Implications for Automakers and Drivers
Not everyone considers the delay of electric vehicle mandates harmless. Adam Thorn, Director of Transportation at the Pembina Institute, argued that relaxing the mandate helps automakers but undermines long-term benefits for Canadians.
While automakers face serious challenges due to US tariffs, the government could have maintained the overall regulatory goal by adjusting existing flexible compliance conditions to provide automakers with the necessary breathing room.
Thorn suggested options such as extending credits for plug-in hybrids and charging stations, softening targets, or reviewing tariffs on Chinese-made electric vehicles. These steps could support the industry without weakening Canada’s overall electrification goals.
This policy change occurs against a backdrop of global economic challenges, including trade wars and supply chain issues affecting the auto industry. Many countries are reassessing their environmental goals, trying to find a balance between environmental ambitions and economic feasibility. In Canada’s case, this may lead to a more realistic, though less ambitious, timeline for transitioning to clean transportation.