Via media briefs, we purpose to offer helpful factual and contextual info associated to Canada’s clear vitality transition. Please use this as a useful resource, and tell us if there are any subjects that you just want to see for future media briefs.
U.S. tariff uncertainty, paused authorities rebates, and Canada’s comparatively restricted EV market have precipitated Canada’s EV transition to hit a snag: whereas EVs are projected to make up a file one in 4 new automobiles offered globally this yr, Canadian gross sales fell 23% within the first quarter and 34% within the second in comparison with final. Pointing to this slowdown, Honda and others have delayed their Canadian EV manufacturing plans.
The EV Availability Commonplace, designed to spice up home competitors by encouraging automakers to provide extra zero-emission fashions over time, was set to take impact with the 2026 mannequin yr however has now been paused for overview. Because the federal authorities evaluates the coverage, this temporary explores what it’s, how comparable requirements work elsewhere, and the way Canada’s model may very well be adjusted to develop reasonably priced alternative for Canadian drivers.
What’s it?
- The EV Availability Commonplace is a consumer-first coverage that requires carmakers to promote an rising share of electrical autos in Canada. Its function, as its identify suggests, is to incentivize automakers to make out there higher and extra reasonably priced zero-emission choices over time with a purpose to meet specified targets (initially ranging from 20% for the 2026 mannequin yr, with interim targets earlier than reaching 100% by 2035). The usual is at present paused for overview, which means the 2026 goal doesn’t at present apply.
How does it profit Canadians?
- The EV Availability Commonplace helps Canadians entry the perfect makes and fashions out there globally by incentivizing carmakers to prioritize the Canadian market when deciding the place to ship their EVs.
- It additionally helps drive down the common worth of EVs within the nation by encouraging a larger provide of lower-priced fashions to fulfill extra of the market.
Does it work?
- Jurisdictions with EV gross sales laws in place are inclined to have considerably larger ranges of EV adoption and recurrently get the latest makes and fashions earlier than others.
How does it differ from tailpipe emission requirements? Might Canada obtain its objectives by way of tailpipe emission requirements as a substitute?
- Some have recommended Canada’s U.S.-aligned tailpipe emission requirements might alone obtain comparable objectives. Whereas that will have been attainable (U.S. emissions requirements are moderately bold), quickly there’ll very possible not be any U.S. requirements for Canada to align with.
- Canada’s EV Availability Commonplace, previous to its current pause, stood as the one certain coverage Canada needed to form the nation’s car combine past 2026.
Does it embrace a ‘$20K tax on fuel automobiles’?
- No. This incessantly misrepresented determine comes from part of the regulation that enables carmakers to depend investments in charging infrastructure as credit in the direction of their EV targets. For every $20,000 funding in new fast-chargers, carmakers can earn one credit score. Carmakers can solely use this selection to fulfill a most of 10% of their EV goal in any given yr. Charging investments are a compliance flexibility, not a penalty or requirement. Below the federal regulation, carmakers will not be topic to any outlined financial fines for failing to fulfill their EV gross sales targets.
What are different methods carmakers can meet their targets?
- Moreover charging funding credit (see above), carmakers have many different methods to fulfill EV gross sales targets underneath the coverage.
- These already promoting EVs within the mannequin years previous any gross sales necessities (2024, 2025) can earn “Early Motion Credit” they’ll use to fulfill future necessities.
- Equally, carmakers can exceed their EV quotas in any given yr and “financial institution” these credit to be used in future years or promote them to carmakers who want them.
- Carmakers are additionally granted a grace interval of three years—that’s, if a carmaker falls wanting its goal in any given yr, it has three years to make up that deficit by promoting extra EVs than it must in future years. Which means, if the primary yr of necessities will now be 2027, carmakers might select to not promote a single EV till 2029.
- B.C. and Quebec are jurisdictions the place such flexibilities have confirmed profitable. Regardless of each provinces setting extra bold targets than Canada’s (26% and 33% by 2026), carmakers have by no means fallen out of compliance in both province.
- In Quebec, for instance, the EV credit score market is so oversupplied with credit carmakers earned between 2014 (when Early Motion Credit first grew to become out there) and 2023 that carmakers would have the ability to meet their complete mixed 2024 targets even when they didn’t promote a single EV that yr.
Does it ban all gross sales of autos with a fuel tank?
- No. New plug-in hybrid electrical autos (autos with a fuel tank and an exterior plug) are nonetheless allowed to be offered underneath Canada’s EV Availability Commonplace.
- Used gas-powered autos will also be offered on the secondhand market (54% of all car gross sales in 2022 have been of used autos) lengthy after the 100% gross sales requirement kicks in in 2035. This coverage covers solely new car gross sales, not used.
Is EV demand in Canada cooling?
- Canadian EV gross sales have, on common, elevated by almost 50% annually since 2020, in comparison with 2% for solely fossil-fuel-powered autos. And earlier than the current sequence of pauses to totally different authorities rebates, Canada’s nationwide EV gross sales share had climbed to a file 18% within the last quarter of 2024 or 15% for the complete 2024 yr (confer with graph).
- Whereas 2025 EV gross sales in Canada have slowed, this isn’t essentially indicative of cooled demand. Fairly, the federal, B.C. and Quebec rebates have been all paused earlier this yr, protecting would-be consumers ready on the sidelines to see if rebates might be introduced again.
- One other current ballot by Clear Vitality Canada and Abacus Knowledge finds that 45% of Canadians are nonetheless inclined to get an EV as their subsequent car, with curiosity larger in sure areas like Quebec (55%) and B.C. (53%), in addition to amongst younger folks aged 18 to 29 (57%) and 30 to 44 (52%).
Has the worldwide EV transition slowed?
- No.Whereas the tempo of progress itself has slowed—a standard signal for a maturing market—world EV gross sales are nonetheless rising. Within the first half of 2025, EV gross sales elevated by 28% globally in comparison with the identical interval final yr (3% in North America, 26% in Europe, 32% in China, and 40% in the remainder of the world).
- The Worldwide Vitality Company expects a couple of in 4 new automobiles offered worldwide to be an EV this yr.
Ought to conventional hybrids be included?
- Standard hybrids can solely be run on fossil fuels, emit considerably extra greenhouse gases than EVs, and in addition don’t supply the identical financial savings advantages.
- Together with standard hybrids would additionally undermine numerous the usual’s aims—enhancing EV availability and affordability, stimulating funding in transformative battery electrical car know-how, and offering market certainty for charging station suppliers seeking to construct out Canada’s charging community (as a result of standard hybrids don’t have a plug).
How will the EV Availability Commonplace—and its pause—influence Canada’s auto business?
- The usual encourages Canada’s auto business to align with world markets, lots of that are additionally quickly transitioning to EVs (the U.Ok., EU, and China all have their very own variations of the coverage with even larger targets). With out an accelerated transition, Canada’s auto sector will shortly turn into much more uncompetitive.
- Pausing the regulation, because the Prime Minister has, voids the 2026 requirement and creates demand uncertainty for the auto business, doubtlessly stalling essential investments and delaying the transition. Any additional delays in coverage implementation would exacerbate this uncertainty and trigger Canada to fall even additional behind.
Doesn’t this coverage solely profit Tesla?
- No. Below the federal EV Availability Commonplace, carmakers can at present solely earn Early Motion Credit for EV gross sales above a set threshold. These credit will not be tradeable—they’ll solely be utilized by the automaker that earned them. To this point, nobody has purchased credit from Tesla (or another firm) underneath the federal coverage.
Do U.S. tariffs make the EV Availability Commonplace targets more durable to fulfill?
- Solely 15% of EV fashions supplied in Canada are affected by the U.S. tariff. The tariffs are solely relevant if the car is assembled within the U.S., and the overwhelming majority of EV fashions in Canada are assembled in non-US international locations comparable to Germany, Belgium or South Korea. There are additionally tariff exceptions for automakers that function meeting crops in Canada, which embrace Ford, Common Motors, Honda, Stellantis and Toyota. As such, almost all automakers are spared.
Is Canada’s public charging community adequate to help our EV targets?
- As much as 90% of charging occurs at residence (the place it’s the most affordable and most handy), which is why the true query is how you can get extra residence charging into multi-unit buildings. However public charging is nonetheless nonetheless essential for highway journeys and people who recurrently drive above-average distances—and Canada’s public community is rising quickly to fulfill anticipated demand: over the past yr, the community grew by about 25%, with tens of hundreds of further chargers already deliberate and funded.
- Retaining the EV Availability Commonplace in place is among the finest methods to help personal sector funding in Canada’s public charging community, as utilities make the most of EV targets to assist mission electrical energy demand, builders depend on them when deciding whether or not to incorporate EV charging in new buildings, and charging station suppliers use them to find out whether or not the enterprise case for charging investments in sure areas exists.
- A current PBO report finds that the coverage would alone unlock sufficient personal sector funding to develop Canada’s charging community to simply wanting the place it must be by 2030.
Ought to the usual be up to date, and in that case, how?
- The federal authorities’s choice to pause the Electrical Car Availability Commonplace is a chance to regulate the coverage to higher obtain its main aims of accelerating shopper alternative and EV availability.
