Key Points:
- Canada is ending its mandatory electric vehicle sales quota for automakers.
- The government will now offer CC$2.3 billion to give buyers up to C$5,000 off the purchase or lease of a new EV.
- Billions more are allocated for charging infrastructure and to support auto manufacturers.
- The new plan uses stricter vehicle emissions standards to reach a 75% EV sales goal by 2035.
Canadian Prime Minister Mark Carney announced a major overhaul of the country’s electric vehicle strategy on Wednesday. The government is scrapping its national EV sales mandate, which had required automakers to meet specific sales quotas for zero-emission vehicles. Instead, Ottawa will now focus on encouraging consumers to make the switch voluntarily.
To do this, the government is rolling out a multi-billion-dollar incentive package. The plan includes C$2.3 billion to give buyers up to C$5,000 off the purchase or lease of a new EV. Another C3.1 billion will be spent to build out the country’s charging network, and is set aside to help Canada’s auto sector retool its factories for electric car production.
This new approach replaces the previous government’s policy, which mandated that 20% of all vehicles sold in 2026 had to be electric. Automakers argued that the rule was unsustainable. Carney said the new plan “focuses on the results that matter” without placing “undue burdens” on the industry. The government will now rely on stronger emissions standards for cars made between 2027 and 2032 to push the market toward its new goals of 75% EV sales by 2035.
The decision brings Canada’s policy more in line with Europe, which recently backed away from its own plan to ban gas-powered cars. It creates a stark contrast with the United States, where the Trump administration ended the national $7,500 EV tax credit.
The announcement drew mixed reactions. The Canadian Vehicle Manufacturers’ Association praised the move, saying the new funding will help drive EV adoption. However, environmental groups were furious. Sam Hersh of Environmental Defence called the strategy “a huge setback” that would lead to the long-term decline of the auto industry.
The policy change comes as Canada navigates a difficult trade relationship with the U.S. and looks to diversify its partners. Last month, Carney secured a deal with China to lower tariffs on Chinese-made EVs, though he confirmed these vehicles would not be eligible for the new Canadian purchase incentives.
