New Auto Sector Strategy to Scrap EV Sales Mandate, Restore Purchase Incentive

Canada is set to introduce a new automotive strategy Thursday that scraps sales mandates for electric vehicle deployment, sets new fuel efficiency standards in its place, and restores the consumer rebates that had previously encouraged consumers to buy EVs, according to news reports.

Ottawa has been under intense pressure from the auto industry lobby to lift the previous Trudeau government’s requirement that EVs account for 60% of new vehicle sales by 2030 and 100% by 2035. “The new system ⁠replacing the EV mandate will allow manufacturers to earn credits for producing electric vehicles, and let them carry over credits earned under the ⁠old mandate structure,” Reuters reports.

“Money will also be announced to build more charging stations for EVs across Canada to help consumers,” CBC writes. The Canadian Press puts the value of a new EV infrastructure investment fund at $1.5 billion.

When Prime Minister Mark Carney paused the 2026 target of 20% of new vehicle sales for EVs last September, he said Canadian automakers had “enough on their plate” responding to Donald Trump’s tariff wars. Now, “there are signs the government is expected to get rid of the EV mandate,” the national broadcaster says, citing industry sources, while “improving Canada’s passenger automobile and light truck greenhouse gas emission regulations.”

There’s no word yet on when the new system will take effect, or whether it will deliver the same emissions reduction as the sales mandate.

CBC’s sources say the purchase incentive for zero-emission vehicles will be restored. more than a year after the government cancelled the popular program when it ran out of money. Environment and Climate Change Minister Julie Dabrusin first promised its return in June, after EV sales had fallen 50%.

This week her predecessor, Quebec MP Steven Guilbeault, said he agreed with restoring the consumer incentive and would be open to some changes to the EV sales mandate, but wouldn’t want to see it scrapped entirely.

“We need that mandate,” he told CBC. “It is essential. Not just for climate change, but in terms of air pollution, the impacts, the health benefits of doing this are very important.”

While it’s not clear what Canada’s standards will be, CP says Europe’s current target is to ensure that all new cars and vans produce no emissions by 2035—although revised regulations proposed in December would reduce the target to 90%, allowing some flexibility for plug-in hybrids.

One source said Canada’s new emissions regulations would get close to the reduction in emissions set out in the original EV mandate.