EVs left in limbo after Mark Carney hits the brakes on sales mandate

Toronto resident Rick Smith has been eyeing an electric vehicle for months, but “regulatory uncertainty at the federal level” has kept him and his family from making the switch. The hesitation only deepened after Prime Minister Mark Carney announced a pause on Canada’s EV mandate.

On September 5, Carney said the government would suspend the mandate for 2026, and initiated a 60-day review period to determine the future of the keystone climate policy. 

First introduced in 2021 under former prime minister Justin Trudeau, the policy required automakers selling passenger cars, SUVs and pickup trucks in Canada to meet rising zero-emission vehicle sales targets: 20 percent by 2026 and 100 percent by 2035.

Once hailed as a cornerstone of Canada’s net-zero strategy, the EV mandate is now on shaky ground, alongside the unfunded federal rebate, rising tariffs on Chinese models and a growing patchwork of inconsistent provincial policies. 

While Ontario Premier Doug Ford and Carney placate the auto industry and the oil giants that drive it, experts warn the real cost of delay may be borne by Canadian drivers left with fewer affordable options, and a country falling behind as the world goes electric.

The pause announced by Carney is part of a broader package of measures to support industries most affected by U.S. President Donald Trump's tariffs, with the EV mandate also set to be waived for 2026 models.

“The direction the federal government takes on the EV availability standard is going to be a real litmus test of how committed the Carney government is to defending existing climate policies, let alone introducing new ones. With the removal of the consumer carbon price, which helped Canadians make cleaner choices, the EV standard now carries extra weight in reducing emissions from transportation,” Clean Energy Canada’s director of policy and strategy, Joanna Kyriazis, told The Pointer.

“If the government caves to opposition and abandons this policy entirely, unfortunately, it would open the floodgates and allow opposition parties, other premiers, industry to just start picking off all of the other climate policies on the books one by one, and use the same playbook of political polarization.”

In an email to Brampton North—Caledon Liberal MP Ruby Sahota, Brampton Environmental Alliance president David Laing expressed deep disappointment over Carney’s announcement. 

Laing wrote that he voted for the Liberal Party this past spring because he believed Carney was the only leader who truly understood the science of climate change, the urgency of national action and the political skill needed to balance environmental sustainability with economic growth. 

Instead, he said, the Prime Minister has capitulated—scrapping the consumer carbon tax, weakening environmental protections, greenlighting further oil and gas infrastructure, including pipelines through northern British Columbia and now walking back EV targets under pressure from the auto industry. 

“Please help me understand why your leader has chosen to take this position, knowing that his actions will only contribute to greater global warming, leading to further environmental destruction, property loss and human suffering. Where is the other side of the equation? Why is he not demanding from industry and provincial leaders that he can help them grow their businesses and economies only if they take swift and aggressive action to reduce emissions? That’s the leader I thought I was voting for. So disappointed,” Laing wrote in the email, shared with The Pointer.

The EV sales mandate was the sole major policy from the 2022 climate plan that has moved forward. With its suspension, the Liberal government’s climate efforts in Canada now seem to have stagnated, as Carney has clearly pivoted more to the right of centre on issues that Conservatives have long championed.

Critics wonder if the new PM’s moves are more political calculation than sound economic policy, as the minority Liberals plot a path to govern while trying to make all sides happy. Some warn it could backfire, alienating the progressive Liberal base, while failing to woo right-of-centre voters, the vast majority of whom stuck with the Conservatives, despite the Trump bump Carney benefitted from. The Liberals won the election largely due to the slumping NDP, whose frustrated supporters might not give Carney a second chance if he continues to walk back past environmental commitments under Justin Trudeau, while contradicting much of his claimed advocacy before entering politics.

Climate Emergency Unit’s director of Strategy Seth Klein fears the pause on the 2026 ZEV sales mandate may just be the beginning of a wider rollback of key policies previous Liberal governments implemented strategically.

“It's not just that government legislated EV sales targets—by doing so, they effectively compelled both industry and government to take action to meet them. The mandates didn’t stand alone. They were supported by a carbon price that made gas-powered vehicles more expensive to operate, investments in charging infrastructure and consumer rebates to lower the upfront cost of EVs. Now, one by one, those supporting measures are being stripped away,” Klein said.

“I think they're [now] caving to industry, to the manufacturers who never wanted the mandates.”

In July, when Carney met with automotive sector leaders to discuss U.S. trade negotiations as concerns were mounting that tariffs and counter-tariffs could drive up the price of new cars, including EVs, one of the main demands from the industry was for him to scrap the ZEV sales mandate.  

In May, an Electric Mobility Canada (EMC) study found that most EV models available in Canada are not subject to the country’s 21.25 percent automotive counter-tariffs, as the majority of EVs sold here are imported from outside the U.S. It urged the federal government to uphold the EV Availability Standard, arguing that it is essential to ensuring continued access to a growing variety of electric vehicles, including more affordable models for Canadian consumers.

A May 2025 study by Electric Mobility Canada found that out of 89 battery electric and plug-in hybrid models offered by 33 automakers in Canada, only six are impacted by the federal automotive counter-tariffs, representing less than seven percent of available models and under five percent of total EV sales in 2024.

(EMC)

Klein, too, wishes the government weren’t pausing the policy and finds its direction unclear, especially after its first act, scrapping the consumer carbon price in April, was not followed by an equivalent or stronger replacement.

“It would be one thing if, each time the Carney government jettisoned a key climate policy, they were replacing it with something else. But they aren't,” Klein told The Pointer. 

Smith, who is president of the Canadian Climate Institute, echoed the concern, pointing to the broader uncertainty now facing the country. “Canadians and the market and investors are plunged into an open-ended two-month review. So it's a general lack of clarity on climate change policy that we think needs to end.” 

A 2021 report by the Canadian Climate Institute, a policy think-tank partly funded by Environment and Climate Change Canada, modelled 60 different pathways to net-zero and found that the transition to zero-emission vehicles was a cornerstone of every scenario, and one of the safest bets for the country.

(Canadian Climate Institute)

The EV sales mandate was a key part of Canada’s strategy to decarbonize the transportation sector, one of the largest sources of greenhouse gas (GHG) emissions. In 2021, transportation was responsible for 187.7 megatonnes of GHGs, accounting for 28 percent of the national total. The vast majority of those emissions came from road vehicles.

That year, the country’s total GHG emissions stood at 670.4 megatonnes, a decline of 10.4 percent from the 2007 peak of 748.1 megatonnes.

A 2024 study by the University of Guelph found that the federal ZEV mandate would reduce Canada’s GHG emissions by roughly eight percent by 2050 compared to a scenario without the policy. Scrapping the mandate would mean losing that eight percent reduction.

It would also result in over $90 billion in health benefits for Canadians over the next 25 years, including up to 11,000 avoided premature deaths, according to a 2023 report from The Atmospheric Fund.

A 2025 Health Canada analysis shows that the air pollution from on-road vehicles nationally contributes to an estimated 1,200 premature deaths and millions of cases of non-fatal health outcomes annually, with a total estimated economic cost of $9.5 billion each year. The emissions from light-duty vehicles contribute a little over a third of those health impacts. 

By 2050, the regulations are projected to reduce various air pollutant emissions from light-duty vehicles, including reducing fine particular matter (PM 2.5) by 36 percent, nitrogen oxide by 50 percent, volatile organic compounds by 61 percent, and carbon monoxide by 68 percent.

“The regulations will contribute to Canada’s climate change goals by preventing 362 megatonnes of cumulative greenhouse gas emissions. The monetized benefits of reducing these greenhouse gas emissions are estimated to be about $96 billion,” a government of Canada report noted.

“Even accounting for the higher purchase price of many ZEVs in 2023, these greenhouse gas benefits, together with the estimated $36.7 billion in reduced energy costs over the next 25 years, give these regulations an estimated total net benefit of $78.6 billion.”

 In 2021, the Census of Population found that 83.9 percent of Canada’s 13.1 million commuters, about 11 million people, travelled by car, truck, or van, with nearly nine in ten driving alone, while 13.9 percent relied on sustainable transportation such as transit (7.7 percent) or walking and cycling (6.2 percent), and 2.2 percent used other methods. Commuting habits were still shaped by the pandemic, which saw 24.3 percent of workers at home, but patterns began shifting back by May 2022 as restrictions eased, with Labour Force Survey data showing 12.5 million Canadians commuting by car, surpassing pre-pandemic levels, and vehicle registration trends highlighting a broader transition as gasoline’s share of new registrations dropped from 88 percent in 2020 to 80.6 percent in late 2022 while hybrid, plug-in hybrid, and battery electric vehicles more than doubled to 14.7 percent of new registrations. The momentum is now at risk as Ontario Premier Doug Ford’s August 14, 2025 order requiring all provincial public servants to return to the office full-time by January 2026 could put more cars back on the road and drive emissions upward.

(Government of Ontario)

The federal government’s approach to emissions policy is also shifting. Carney has declined to endorse firm GHG targets, saying he's focused on "results, not objectives".

During a September 12 media briefing in Winnipeg, energy minister Tim Hodgson said Ottawa is in active discussions with Alberta and the oil industry about the future of the sector’s emissions cap, but did not confirm whether the cap would be scrapped. 

Hodgson said all parties agree on the need for a "fundamental change in the emissions intensity of the oilsands."

Since the announcement, reaction to the EV mandate pause has been mixed. Some industry voices point to tariffs and slowing sales as reasons to hit pause. Many advocates argue demand has not dried up—rather, it has been hampered by the end of federal rebates and limited vehicle availability at dealerships.

In 2024, approximately one in seven new vehicles sold in Canada (13.8 percent) was a zero-emission vehicle (ZEV), according to Statistics Canada. More than 264,000 ZEVs were purchased that year, valued at $17.3 billion. Sales were noticeably stronger in the second half of the year, peaking in September with 30,318 cars sold as new models entered the market.

Monthly new motor vehicle sales in 2024, broken down by total and zero-emission vehicles, show that overall sales peaked in May at 185,178 units, and zero-emission vehicle sales reached a high of 30,318 units in September, reflecting growing consumer interest in cleaner transportation options.

(Statistics Canada)

Momentum faltered in early 2025 after the Incentives for Zero-Emission Vehicles (iZEV) Program, which offered rebates of up to $5,000, ran out of funds in January, two months ahead of schedule due to high demand. Industry experts say its end and the absence of funding for the program since, contributed to falling sales.

A recent S&P report highlighted EV sales in Canada reached 19 percent in Q4 2024, just shy of the 20 percent target set for 2026, before federal purchase incentives were abruptly cut. The final share for the year landed at 15 percent.

Smith says uncertainty is now the biggest barrier for buyers.

“Our next car is going to be an EV. But there's been regulatory uncertainty at the federal level as to whether this availability standard would continue, and the purchase incentives to buy electric vehicles ran out earlier in the year,” he added.

“This current federal government was elected on a platform of bringing those back, and so there's just a lot of uncertainty in the car market when it comes to electric vehicles, and that's translating to a lack of choice with dealerships.”

Smith has been searching for an EV in the Greater Toronto Area (GTA) for months, but affordable models remain scarce. 

“For a number of the most popular brands, there isn’t much stock. When you ask a dealer about a new model in a preferred colour, the answer is often, ‘maybe in a few months.’ That’s why we need the (EV) availability standard, because globally, EVs are taking over, and Canada risks falling behind,” he posited.

“I think in our country at the moment, because we live next to the United States, and Donald Trump has been so vitriolic in his opposition to our climate policy…there's a tendency in Canada to believe that the whole world has turned against electric vehicles. And in fact, the absolute opposite is the case.”

More than 17 million electric cars were sold worldwide in 2024, making up over 20 percent of all new vehicle sales, a sharp increase from the previous year, according to the International Energy Agency’s (IEA) Global EV Outlook 2025.

Sales are projected to exceed 20 million in 2025, with electric vehicles expected to account for one in every four new cars sold. China maintained its lead, with EV sales topping 11 million, with electric cars accounting for almost half of all car sales in 2024. 

“The over 11 million electric cars sold in China last year were more than global sales just two years earlier,” the report noted.

“The rapid growth in electric car sales over the past five years has had a significant impact on the global car fleet: At the end of 2024, the electric car fleet had reached almost 58 million, about four percent of the total passenger car fleet and more than triple the total electric car fleet in 2021. Notably, the global stock of electric cars displaced over one million barrels per day of oil consumption in 2024. Of course, the stock of electric cars is not spread evenly across the world – in China, for example, around one in ten cars on the road is now electric, whereas in Europe the ratio is closer to one in twenty,” the IEA report noted.

(IEA)

Even in the U.S., the electric car market share continued to grow in 2024, with sales reaching 1.6 million. While the market share increased by ten percent, this is a decline from the significant jump of 40 percent recorded in 2023.

The launch of 24 new electric models expanded consumer choice and increased competition, contributing to a decline in Tesla’s market share from 60 percent in 2020 to 38 percent in 2024, as other automakers saw a 20 percent increase in sales. 

Policy changes, including an update to the Clean Vehicle Tax Credit that allowed buyers to receive an instant rebate at the point of sale, likely encouraged adoption, especially with over half of EV sales qualifying for the incentive. Leasing also surged, driven by a 2023 provision reclassifying leased EVs as commercial vehicles, making them broadly eligible for tax credits. By 2024, nearly half of all EVs sold in the U.S. were leased, supported further by additional state-level incentives offered in 27 states.

In Europe, EV sales stagnated in 2024 as subsidies and other supportive policies began to fade. Still, electric vehicles maintained a 20 percent share of new car sales, with gains in 14 EU member states offsetting declines in others.

In larger markets like Germany and France, EV sales slowed as governments scaled back incentives. Germany ended subsidies at the end of 2023, and France has progressively reduced them, including capping environmental bonuses for higher-income buyers and limiting eligibility for support in 2024.

In the United Kingdom, Europe’s second-largest car market, electric vehicles made up nearly 30 percent of new car sales in 2024, up from 24 percent the previous year. This marked the first year of the Vehicle Emissions Trading Scheme, which required 22 percent of new vehicle registrations to be either battery electric (BEV) or fuel cell electric (FCEV).

In Denmark, the electric vehicle share rose by ten percentage points to reach 56 percent, with nearly 100,000 EVs sold in 2024.

Norway reached near-total electrification of sales, with 88 percent of car sales being battery electric and just under three percent plug-in hybrid. The growing share of electric cars led to a 12 percent drop in road-related oil consumption compared to 2021. A planned tax hike on internal combustion engine (ICE) vehicles and plug-in hybrids, which started in April, is expected to push the battery electric share even higher as the country aims for 100 percent zero-emission car sales by the end of 2025.

In Canada, mandates have been effective, and provincial programs have already shown the impact well-designed incentives can have.

Quebec led the country in 2024, accounting for more than half (53.9 percent) of all ZEV sales in Canada. Its Roulez vert program offered rebates of up to $7,000, and when combined with the federal rebate, Quebec buyers could save as much as $12,000. The looming reduction of the provincial rebate to $4,000 in January 2025 spurred a year-end sales rush. By year’s end, ZEVs made up 30.1 percent of new vehicle sales in the province, the highest proportion in Canada.

British Columbia and the territories ranked second, where ZEVs represented 20.7 percent of new purchases. B.C.’s rebate program offers residents up to $4,000, with additional amounts based on income and vehicle type.

Elsewhere, adoption was slower: Prince Edward Island (7.8 percent), Ontario (7.4 percent)—slowed by Premier Doug Ford’s cut to preexisting subsidies— Nova Scotia (6.5 percent), New Brunswick (5.7 percent), Manitoba (4.9 percent), Alberta (4.2 percent), Newfoundland and Labrador (2.6 percent) and Saskatchewan (2.5 percent).

Despite Ottawa’s orders, B.C. Minister of Energy and Climate Solutions Adrian Dix indicated the province is in talks with automakers and open to “moderating” its targets, but he emphasized that the mandate remains in place.

“We have to make changes in those targets…The question is: do we want to be with the direction of the whole world, or with Mr. Trump?" Dix said. 

Kyriazis notes that the EV sales mandate “often gets debated as if it’s about the auto industry, but really, it’s consumer-focused. Its goal is to make EVs more accessible, affordable, and available for Canadians.”

A recent Abacus Data survey conducted for Clean Energy Canada found that 45 percent of Canadians are certain, very likely, or inclined to choose an EV for their next vehicle. Support is especially strong in provinces like Quebec (55 percent) and B.C. (53 percent), as well as among younger Canadians aged 18 to 29 (57 percent) and 30 to 44 (52 percent).

Despite slower EV adoption in several provinces, a majority of Canadians, especially in major urban centres and younger age groups, remain interested in going electric, with surveys showing support increases further when people are given more information.

(Clean Energy Canada)

In major urban centres, the appetite for EVs is even stronger. A separate survey conducted in the Greater Toronto and Hamilton Area (GTHA) and Metro Vancouver found that 69 percent of Metro Vancouver respondents favoured EVs. 

In the GTHA, where actual EV uptake has lagged, 55 percent still said they preferred an EV over a gas-powered car, and that figure jumped to 62 percent when respondents were given more information about EVs, pointing to significant potential for growth with better public education and policy support.

Ahead of last week’s announcement, Carney had the backing of Premier Ford, who repeatedly called for an end to the federal EV sales mandate in recent months, even as his government poured billions into Ontario’s growing EV and battery manufacturing sector. 

“We have to get rid of these mandates so that companies won’t be able to meet their targets. The market will dictate, not governmental dictate,” Ford said during a press conference in July. 

Those words were in stark contrast with what the premier had said in January, before the surprise federal election was called, when he pledged to continue supporting Ontario’s EV industry if re-elected.

“I want (to) make it clear that every partner we have in Ontario's electric vehicle and battery supply chain, a reelected PC government will honour our commitment,” Ford said.
 

When Doug Ford became premier in 2018, his government quickly rolled back several key policies that had been accelerating electric vehicle (EV) adoption in Ontario. Among the first cuts were provincial rebates for EV purchases, incentives for installing home and workplace chargers and EV-friendly provisions in the Ontario Building Code. Public charging stations including those at GO Transit locations were removed, and the cap-and-trade program that funded EV incentives was dismantled. Just eight years after Ontario launched its EV support programs, they were effectively shut down. Ford dismissed the initiatives, claiming they mostly benefited “millionaires who could afford Teslas,” but the numbers told a different story. In 2017, EV sales in Ontario surged to 7,477 units, a 120 percent increase from the previous year. But after the cuts, sales fell sharply: by mid-2019, EV sales were down more than 55 percent compared to the same period in 2018, with second-quarter sales dropping from 7,110 to just 2,933. The downward trend persisted. In 2022, the Ford government released a revised climate plan that made little mention of EVs, despite transportation remaining the largest source of emissions in the province. That same plan was described by the government’s own lawyers in court as little more than a “glossy brochure,” while Ontario’s emissions reached 157 megatonnes of carbon dioxide equivalent.

(Dunsky)

The Progressive Conservative government has also hinted at Ontario’s EV expansion as a key argument for pushing Bill 5, dubbed the Protect Ontario by Unleashing our Economy Act, and accelerating mining in the Ring of Fire, a region rich in minerals but also home to vast peatlands that act as one of the world’s largest carbon sinks.

“I think of some of our broader environmental goals, and one is sustainability. We’re developing, certainly in my community, the electric vehicle industry and, ultimately, for the success of that industry, mining of critical minerals is vital,” PC MPP for Windsor–Tecumseh Andrew Dowie said during the Standing Committee on the Interior meeting for Bill 5 on May 22. 

“Also, I find, having now purchased an electric car—I bought it used—boy, I feel like I’m saving a lot of money by not having to fuel it up and use fossil fuels. I feel my environmental footprint is far better than it was before.”

“Canadians know EVs will save them money over time, because they are so much cheaper to fuel and maintain. But it is that upfront cost that continues to be a hurdle, and especially when geopolitics has led countries to box out China and Chinese technology, where so many investments have been made and so much of the cost reductions have been achieved,” Clean Energy Canada’s Joanna Kyriazis said.

“In China, EVs are already cheaper upfront than gas cars, but now we're putting tariffs on those vehicles and those batteries, and so we're kind of pushing out the timeline for when we get to see more affordable EVs upfront.”

Calling Chinese tariffs “the most challenging piece,” Klein says, when the government imposed the 100 percent tariff on Chinese EVs a year ago, he was of two minds. 

“On one hand, I understood the need to give our industry time to ramp up without being undercut by lower-cost Chinese models. But now, instead of using that time to ramp up production, we’ve effectively given them permission not to,” he added.

“It’s the worst of both worlds. If we’re going to pause the ZEV mandate, then at least make those Chinese EVs more affordable and let them compete.”

Kyriazis argues that Canada should prioritize making electric vehicles more affordable. The EV availability standard is a key policy to do that—by increasing its stringency, it pressures automakers to shift their focus from luxury models to more accessible, mass-market options.

A 2022 study by Environmental Defence found that enforcing a Clean Car Standard could reduce the median EV price by over 20 percent or roughly $7,200, help Canada meet or exceed its ZEV sales targets, cut 135 million tonnes of greenhouse gas emissions by 2035 and ensure the cost of the transition is carried by automakers rather than the public.

She suggests that to balance flexibility for automakers with affordability goals, the policy could offer extra credits for EVs priced under $40,000, the maximum most Canadians want to spend, and for incentives like zero-percent financing, helping lower costs and boost adoption without weakening the policy.

Given the tariff concerns, she notes that automakers operating in Canada also serve the much larger U.S. market, where the recent repeal of fuel efficiency standards by the Trump administration is expected to save them billions in compliance costs — a windfall she says "should offset tariff impacts, making it easier for automakers to meet Canadian EV sales targets."

She also urges Canada to revisit tariffs on Chinese-made EVs. “Unlike Canada and the U.S., the UK and EU applied little or no tariffs, encouraging competition and lower-priced models. Reducing tariffs here could help fill the gap for EVs under $40,000.”

A September 2025 report by TD economists supports this view, arguing that Canada should consider strategic partnerships with China to strengthen its EV ecosystem and achieve climate goals. The current blanket tariff approach has limited access to advanced battery technology and affordable EV options, both key to improving adoption. 

Chinese firms are leading in low-cost manufacturing, battery innovation and fast-charging technology. Selective, well-managed partnerships such as licensing deals, joint research and development, or battery supply agreements could accelerate innovation, lower costs and expand consumer choice, which in turn would help reverse Canada’s declining EV sales and support domestic production.

Kyriazis emphasizes the need for a broader EV affordability package alongside policy improvements: “First, bring back the federal EV rebate, which has been paused since January. This pause has created pent-up demand and artificially lowered EV sales because buyers are waiting to see if the $5,000 incentive will return.”

 Clean Energy Canada’s director of policy and strategy, Joanna Kyriazis, and 70 percent of Canadians support allowing the sale of EVs approved by the EU’s safety standards in Canada. “Currently, Canada aligns with U.S. standards and misses out on many affordable models available in the EU. Recognizing EU standards would open the market to these vehicles, making EVs more accessible,” she noted.

(Clean Energy Canada)

“We need to mainstream EVs by getting them into the hands of everyday Canadians, not just early adopters with higher incomes,” Kyriazis said.

“A retooled EV availability standard that balances flexibility with a strong long-term signal, combined with restoring rebates and easing trade barriers, is how Canada can truly advance the electric vehicle revolution.”

The Atmospheric Fund’s climate policy analyst Samia Anwer believes Canada is at a critical juncture where it has the opportunity to chart its own path instead of following in the footsteps of our neighbours.

“To ensure long-term environmental and economic resilience, Canada must decouple its regulatory direction from the United States. We can no longer afford to be reactive, especially with emissions targets, resident health and safety and local economic opportunities hanging in the balance,” Anwer explained in a statement.

“Key Canadian policies on energy efficiency and clean transportation emissions are at risk. Rather than watering down our standards in response to U.S. rollbacks, Canada should double down – defending, modernizing, and strengthening our own regulations to reflect Canadian priorities, economic conditions and climate commitments. Our environment, our economy and our future depend on it.”

Email: [email protected]

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