ZEV adoption in Canada fell to 8.6% in early 2025, down from 12.9% last year.
Ottawa will relaunch EV purchase incentives but won’t soften sales mandates.
Auto industry leaders call 2026 ZEV target “mathematically incorrect” and warn of supply impacts.
The Canadian government is maintaining its zero-emission vehicle (ZEV) sales mandate despite declining electric vehicle uptake and warnings from industry leaders that the legislated targets are not feasible under current conditions.
Innovation, Science and Economic Development Minister Mélanie Joly confirmed the government’s position on June 10, stating the ZEV mandate is essential to achieving long-term climate goals. “It’s important that we continue to work with the sector, and to be frank, to press the sector to … embrace the transition,” she said during remarks at the Canada Automotive Summit in Vaughan, Ontario.
Under the Electric Vehicle Availability Standard, automakers must ensure that ZEVs account for 20% of sales by the 2026 model year, increasing to 60% by 2030 and reaching 100% by 2035. Automakers can also earn compliance credits by investing in charging infrastructure or selling hybrids.
Industry organizations have responded with sharp criticism. Brian Kingston, president of the Canadian Vehicle Manufacturers’ Association, called the mandate “mathematically and factually incorrect,” pointing to declining consumer demand and warning of potential supply restrictions. “Sales have fallen through the floor,” Kingston said, adding that some automakers are already limiting internal combustion engine vehicle availability in Canada to prepare for compliance.
Ford Canada CEO Bev Goodman echoed the concerns, stating the policy will reduce vehicle availability and increase costs. David Adams, CEO of the Global Automakers of Canada, said the federal targets will be challenging for most overseas automakers to meet by 2026.
Canadian EV Sales Down 45% in March Following End of Federal Incentive Program
ZEV adoption across Canada declined to 8.6% during the first four months of 2025, according to Statistics Canada. That figure is down from 12.9% during the same period in 2024, and well below the monthly high of over 20% recorded in December.
Provincial data shows a similar trend. Quebec’s ZEV share dropped to 13.1% from 23.3% year-over-year, while British Columbia, including the territories, declined to 15.4% from 19.7%.
Joly acknowledged the drop but said Ottawa plans to support consumer adoption by relaunching the Incentives for Zero-Emissions Vehicles (iZEV) program, which expired in January. No timeline was given for the program’s return. She did not say whether the government is considering changing the sales targets but emphasized a willingness to engage in discussions.
Environment and Climate Change Canada has not confirmed any policy adjustments. Press secretary Hermine Landry stated that the ZEV mandate includes built-in flexibilities, such as allowing hybrid vehicles to contribute toward sales targets. Landry said the federal government views U.S. trade tariffs as a more immediate threat to the auto sector.
Meanwhile, provincial governments in Quebec and B.C. are reportedly exploring options to make their mandates more flexible. Quebec mandates 32.5% ZEV sales by 2026, while B.C. targets 26%. Both provinces’ rates remain well below those goals so far in 2025.
Kingston said discussions are ongoing and that provinces appear more open to revising their targets. Adams added that a unified national approach may help reduce regulatory complexity for automakers, many of which operate across multiple provinces.
He said that most automakers support the government’s climate objectives, but they need targets that are more aligned with current market conditions and production timelines.
Executive Order Launches New ZEV Strategy in California, Revises State Procurement Rules
Canada should align its goals with those of the State of California. Together, both entities should apply sufficient pressure on automakers and legislators, allowing all parties to agree on a feasible plan. In short, while climate goals are necessary, automakers need to profit, and ultimately, consumers need to be provided with options that interest them.
Source: Automotive News
