The national automotive strategy is set to be unveiled by the federal government on Thursday, with plans to replace Canada’s electric vehicle mandate with a new framework of fuel efficiency standards and credits. Prime Minister Mark Carney, facing pressure from various stakeholders, has decided to eliminate the incremental sales targets for electric vehicles, which required a certain percentage of new cars to be electric by specific years.
Following a pause in September to review the EV mandate due to challenges posed by U.S. tariffs, the government is moving towards scrapping the mandate. Industry sources have indicated a shift towards a system similar to the European Union’s approach of prioritizing fuel efficiency standards over sales targets.
Under the previous EV mandate, manufacturers could earn credits for producing electric vehicles, and the new system will continue to incentivize electric vehicle production through credit systems. However, details regarding the implementation timeline and emission reduction effectiveness of the new system remain unclear.
Former environment minister Steven Guilbeault expressed openness to changes in the EV mandate but emphasized its importance for addressing climate change and air pollution. Additionally, sources suggest that a consumer incentive program for purchasing EVs will be reintroduced, along with funding for expanding EV charging infrastructure across Canada.
Industry and policy experts have shared mixed reactions to the upcoming announcement, with stakeholders like the Canadian Vehicle Manufacturers’ Association highlighting the challenges faced by the industry, including dealing with tariffs and production costs. Clean Energy Canada has raised concerns about the shift away from the EV mandate but remains hopeful for the impact of new vehicle efficiency standards if properly implemented.
As the announcement date approaches, there is anticipation within the industry to see if the strategy will support Canadian automotive operations and incentivize investments in domestic production. Cabinet ministers have hinted at the importance of the auto strategy in light of ongoing trade challenges, signaling a significant shift in environmental policies under the current government.