Another EV mandate has fallen. Sort of. Canada’s rising-quota mandate that would’ve forced all new vehicles to emit zero emissions by 2035 is now being replaced by a less aggressive greenhouse gas management strategy. Under the new standards, 75 percent of new light-duty vehicles sold in Canada are expected to be electric by 2035, rising to 90 percent in 2040. A provision exists to re-examine and potentially revise these standards in five years’ time, but it does mean that a small number of likely enthusiast-oriented new vehicles can still be fossil-fuelled for the foreseeable future.
For context, Automotive News Canada reports that approximately 1.89 million new vehicles were sold in Canada last year, and that’s without data from Jaguar, Land Rover, Maserati, or Porsche included. Assuming total annual sales holds, roughly 472,500 new vehicles in 2035 and 189,000 new vehicles in 2040 could potentially burn gasoline. That should cover pretty much all the combustion-powered sports and performance cars the Great White North could possibly want. Canada’s 2040 target also aligns with the E.U.’s recently walked-back EV mandate for 2035, so there’s some synergy there.
However, those internal combustion accommodations are assuming that the greenhouse gas emissions targets are met largely by EV sales. Traditional, plug-in, and range-extender hybrids will likely play a role in the marketplace, especially in segments that demand towing and other things battery electric vehicles aren’t typically ideal for. In that case, the allowable cap for combustion-powered vehicles will shrink, although it should allow a number of more traditional enthusiast cars to stay on sale. It’s also worth noting that heavy-duty pickup trucks with a gross vehicle weight rating of more than 10,000 pounds aren’t classified as light-duty vehicles and therefore won’t be subject to the same emissions standards as light-duty vehicles.
Plus, it’s not like Canada isn’t going to be incentivizing EV sales in the near future. With federal rebates ending early last year, EV sales in Canada plummeted to around 94,500 units through December, as Automotive News Canada reports. That number is going to have to rise quickly, so the government is throwing money at the problem. A new incentive program for EVs and plug-in hybrid is rolling out as early as Feb. 16, and the way it works is pretty interesting.
This year, electric vehicles priced under $50,000 and built in nations Canada has free trade agreements with, along with all battery electric vehicles made in Canada, will be eligible for a $5,000 purchase or lease incentive. That figure ramps down to $4,000 in 2027, $3,000 for 2028 and 2029, and $2,000 for 2030. Likewise, plug-in hybrids meeting the same requirements are eligible for a $2,500 purchase or lease incentive this year, falling to $2,000 in 2027, $1,500 for 2028 and 2029, and $1,000 in 2030. If you’re keeping track at home, the only EV with a price tag above $50,000 that qualifies for the new incentive is the Dodge Charger Daytona.
Other headline figures include $1.5 billion allocated to national charging infrastructure, up to $3 billion in manufacturing support from deductions to tax credits, and more than $100 million allocated towards employees in training and on reduced hours. All sensible stuff, although there is one big caveat: Detailed updated carbon dioxide emissions standards for the forthcoming years haven’t officially been announced yet, and that’s where the real intentions of this shift will be revealed. Will hybrids meaningfully contribute to this proposed reduction in carbon emissions or will this shift essentially just be a scaled-back EV mandate?
Regardless, escalating from a 15 percent battery electric vehicle and plug-in hybrid market share in 2024 to an EV mandate of 60 percent in 2030 to 100 percent battery-electric in 2035 would’ve been a tall order. It’s also the sort of regulation that runs the risk of creating a perverse incentive depending on market demand. After all, it’s a lot easier and cheaper for manufacturers to restrict the number of combustion-powered vehicles sold in Canada than to attempt to maintain sales volumes while pumping up EV sales to meet the previous targets.
Some of the hurdles are significant. According to a Canadian Automobile Association study, 22 percent of respondents living in multi-unit dwellings have no access to home charging at all. Considering only 52.6 percent of Canadians who responded to the 2021 census lived in single-family detached homes, that’s a huge chunk of infrastructure that will need to be built out. Until that time comes, owning an electric vehicle may be unfeasible for many. With the new national charging infrastructure plan including measures for “making buildings EV-ready,” relaxing EV targets seems like a sensible way to let infrastructure catch up.
As it stands, industry bodies seem relatively appreciative of this latest announcement. As David Adams, President and CEO of Global Automakers of Canada, stated in a media release:
Today the federal government released its automotive strategy. We are pleased that the government has provided greater clarity on issues such as the Electric Vehicle Availability Standard, the re-instatement of EV incentives, and a commitment to aggressively build out the charging infrastructure. These are issues for which we have long sought direction from government and should give Canadians more choice, improve affordability, and make electrified vehicles more accessible. Achieving emissions goals requires clarity and certainty. A single, aligned electrification strategy across federal and provincial governments is critical for planning and investment purposes, as well as giving all Canadians the same vehicle options.
By softening EV adoption targets, Canada seems to be warming up to a certain reality. The ambitious targets set years ago simply weren’t pragmatic, and sometimes goals have to shift. Especially when your motor vehicle safety standards are closely tied with those of a country that’s going two feet in on internal combustion. Are there measures I wish were in this new action plan? Sure. A dedicated used EV tax credit would go a long way to enhancing affordability for the millions of Canadians who can’t afford a brand new car, and as I stated earlier, we’ll need concrete figures on emissions standards to reveal the true intent of this rollback. For now, it looks like the possibility for me and my fellow Canucks to row our own gears into the future is back on the menu. How’s that for a glimmer of hope?
Top graphic image: Dodge
I do wonder whether we’ll see Canada changing its motor vehicle standards to allow compliance with ECE standards instead of the existing US-similar standards. It would make sense.
“Perverse Incentive” sounds redundant. Perversion is its own reward.
I am a huge proponent of EV’s, and I feel that they are a great option for many people, especially in large metro/urban areas like where I live. The only reason I did not purchase an iD4 when I got my Tiguan last spring was because they were on stop sale at the time.
That being said, I still don’t understand the huge, aggressive push for EV’s from anything besides the environmental standpoint. I still do believe there needs to be a heavier investment in PHEV’s before going straight to EV’s. For me personally, if there was a PHEV Tiguan available, I would’ve jumped on it. If VW does bring a PHEV drivetrain here, I may have to get it instead of buying out my Tiguan lease. For most trips, including going to work, where I have roughly a 30 mile round trip commute, I’d never use gas. However, if I go to visit friends or family in Chicago and need the range, then I have it. Yes, I’m still using gas, but at a much smaller level and when it is most efficiently burning, too. I think that this type of scenario would work for many people, especially in our US world where walkability is just generally not a thing and people love to make quick trips in their cars.
Math!
Per here (https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=2310006601), Canada uses about (rounding to the nearest million) 60 billion liters of fossil fuel for on-road consumption (as of 2024) per year, split (roughly) as 17B in diesel and 43B in gasoline.
Because unit-conversions are fun, we can convert a liter of fuel to some number of watt-hours, which gives us some notion of electrical consumption equivalent of 8.9X43B for kwh-equivalent consumed, or about 383 billion kwh for gasoline, and (at 10kwh per liter or so) about 170B kwh for diesel; combined, let’s call it 550 billion kwh, or about 550 terawatt-hours.
What’s Canada’s annual electrical generation? Well, just slightly more than that right now:
https://www150.statcan.gc.ca/n1/daily-quotidien/251022/dq251022c-eng.htm
(convert the million MWh to terawatt-hours to get there). A total of 662TWh produced.
Now, we can do some funky things to get at better economies for EV’s – most of them are more aerodynamic, they have regen, and so on, such that you can typically get between 2 and 3 miles per kwh, and if you convert your miles-per-gallon to miles-per-kwh of a regular ICE passenger car, you end up with considerably less efficiency (between 1/3 and 1/2).
Fundamentally, in order to actually electrify all the EV’s Canada wanted on the road to hit their 100% electrification target would have required adding an incremental 180TWh to 275TWh annual capacity in their electrical grid – or growing it by roughly 25-35% – in under a decade.
That simply was not going to happen. Politicians are not very good engineers and many of them are even worse at the kind of unsung (no politician is getting his name slapped on a power plant and celebrating it) infrastructure engineering that this kind of plan requires.
Europe is doing the same math and coming to the same conclusions, which is also why they’ve rolled back their mandates. You can choose where your environmentalism goes – either towards eliminating tailpipe emissions or towards the greening of the grid itself – but you cannot do both.
You realize, of course that your representation of watt-hours in a gallon of hydrocarbons is off by about a factor of 3x, because most of those watt-hours are excess heat that has to be actively discharged into the environment through coolant and fans. ICE engines are typically less than 30% efficient, with the real misery examples hitting 42% in controlled environments, and large displacement engines woth spare capacity for thongs like towing are down in the low 20s. EV motors are above 90%.
Math is fun, method is even ore fun.
Yeah, I literally called that out in my comment:
So, now, it isn’t off by a factor of 3x, as I adjusted the amount of energy currently being used (550TWh in fossil-fuels 2024) to, and I quote:
That present-day 550TWh to future-state 180TWh-275TWh represents the efficiency (or if you prefer it the other way around, the inefficiency of ICE vehicles) I called out up top.
Not entirely sure how you missed that.
Not disputing the numbers, but just adding further notes on electrical capacity.
Currently Quebec and Ontario are net exporters of electricity, with Quebec heavily hydro-electric (and somewhat scaleable), and Ontario heavily Nuclear/Hydro-electric based – with 1.2TWh of new SMRs under construction. Other areas of Canada & US import power from those provinces (much of New England & upper Midwest). So there is significant excess capacity in some areas of Canada (nothing near the numbers you note).
That said: any new power generation does not come online quickly, and these SMRs will take many many years to get online: they were announced in 2023, and are not scheduled to come online until 2030.
So, yes, it’s good that there’s now an adult in the room realizing the mandate didn’t make sense without pairing with infrastructure.
The Department of Energy has run these numbers for the USA. In the highest EV adoption scenario they are looking at a requirement to add 350 GW of new generation capacity between 2020 and 2050 to support switching the vehicle fleet from gas and diesel to EV with the highest yearly increase of 15 GW per year in late 2030’s.
Something that you seem to be missing is that nobody is talking about replacing all ICE vehicles by 2035. They are talking about phasing out the sale of NEW ICE vehicle gradually. Then it takes decades more to turn over the old ICE vehicle fleet. Even under the most aggressive DOE scenario 10% of the vehicle fleet in 2050 is still ICE.
https://www.energy.gov/eere/vehicles/articles/summary-report-evs-scale-and-us-electric-power-system-2019
The fact that traditional technology has in no way been fully exploited is the random stinky turd that is always in the battery powered garden of eden.
Internal combustion automobiles managed to catch on despite the lack of gasoline stations.
As for Canada , other sources say at they are doubling down on EVs and even cutting back tariffs on Chinese EVs
https://www.nytimes.com/2026/01/16/world/canada/canada-slash-tariffs-chinese-evs.html?smid=url-share
And
https://www.nytimes.com/2026/02/05/world/canada/carney-canada-electric-vehicles-trump-trade.html
Am I reading this right? Total light duty vehicle sales in Canada is about 2 million per year but they only sold 100k EV’s. So they need to go from a 5% share to a 90% share in 15 years? I don’t see this working.
Look I have nothing against EV vehicles (just the tech laden ones) but there has to be a better way to encourage EV growth than mandates. Start with credits like they are and slightly raise the gas tax people will switch on their own when it makes financial sense.
One rule of innovation says that people will not adopt SUCCESSFUL innovations until the benefits are overwhelming.
Battery cars are nowhere close to that.
The accuracy of that paradigm can be debated, but it’s often true.
It makes sense to me. For people who current EV’s work for they will buy them if they make sense. You don’t see private airplane EV’s everywhere because they don’t make sense.
Taxes and credits are just a way to “tip the scales” or if you prefer “force people to make decisions that are against their choice because of money”.
Considering how Canada is absolutely gigantic like the United States, this is a logical move by Canada. It’s simply not possible in that timeframe.
I understand wanting to get to a majority EV goal, but it needs to happen organically.
Like the author said about the many folks that live in situations without charging ability or infrastructure, this will prove challenging.
Also: I don’t understand why governments even offered an incentive in the form of a rebate to purchase EVs.
If an individual wants one, they will purchase it if not, they won’t.
It could be for political reasons. “vote for me or you will lose your tax rebate” or “vote for me for EV’s or the world will be destroyed in 10 years.
Edit: I read the CBC report and it is also intended as a way to boost EV manufacturing in Canada.
I just love (read: hate) how everyone thinks there’s no hurry to deal with climate change…
Let me assure you this is a completely serious question with no malice I just want to hear your opinion.
What climate scenario are we hurrying to avoid?
There are many possible tipping points between what’s going on now and what is possible without a hard push toward reducing emissions.
I think the evidence is clear that over population will self regulate soon enough.
If humans survive this process, population driven issues may no longer be relevant.
until china and india are on board, its really just a fun way to kneecap all western nations and let them overtake us. So push for global shipping to end, push for china and india to stop destroying the entire world, and then, once that is figured out, maybe your EV’s will matter.
It’s performative, largely.
I like some facets of EV’s. Dislike others.
But saving the world, they are not – there’s still the matter of needing to generate power somewhere (which is due to economies of scale still less than would be generated at the tailpipe, but also not zero), needing to extract the ore necessary to make the battery packs, and so on. The most climate-friendly vehicle one can own in 2035 is probably the one that’s already sitting in your driveway, as the extraction/manufacturing/transportation cost of a new EV (as expressed in carbon emissions) is almost assuredly much higher than a couple hundred gallons of incremental fossil fuel burned per year.
That might be true, but no one is saying we should scrap all the existing ICE cars.
All this EV mandate discussion is about NEW cars, and there is overwhelming evidence that EVs are far better than ICEVs in terms of climate and health of the people living around them.
Instead of my half-assed comments addressing these issues, here’s an excellent video that does a far better job: https://www.youtube.com/watch?v=Zgxb8I1nk2I
It’s a long video, but it is worth your time if you’re genuinely interested in learning more. If you’ve already made up your mind about EVs being useless, then please ignore me and have a nice day!
I’m not sure where you are getting your news, but China is most definitely overtaking us in the EV space. If anything we are the ones who are lagging behind.
I am fully aware of the pollution caused by cargo ships, but unfortunately that’s out of our hands. Actually that best way to reduce emissions from the transportation sector by the average person is more mass transit, but of course that’s not an option in the land of the free…
Iceland?
Everyone is still waiting for evidence we can affect climate change in any way.
Some random person making up goals that govts clearly have no interest in, is only evidence of time wasting.
Looks like the real agenda is profit.
Why would Trump do this?
Anyway… I was in Quebec over Christmas and I will very much say they have integrated chargers onto city street parking in a very good, useable way that was efficient, cheap and made tons of sense
I always love when current administrations write rules for future administrations and everyone thinks that they will even last 1 minute after a new administration takes over.
So.
Does the US qualify as a “free-trade country” or has that bridge been burnt with tariffs (despite having a “free trade agreement” that has been intentionally disregarded)?
Tariffs are meaningless as Canada cannot live without the US market. And once Trump is gone Vance can lessen the tariffs to the same percentage Canada has on US vehicles.
The free trade horse left the barn and locked the door behind itself, crossed the bridge and set fire to it, and is now drinking the water that has gone over the dam.
I don’t think it’s coming back very soon.