Canada’s push to increase electric vehicle (EV) adoption is triggering major changes across the auto industry. Under new federal rules, automakers must ensure that at least 20 per cent of all new vehicles sold in Canada by 2026 are zero-emission. That share must rise to 60 per cent by 2030, and reach 100 per cent by 2035.
The requirements are part of the federal government’s Zero Emission Vehicle (ZEV) Sales Mandate. Unlike past climate goals, these targets are now legally binding. Companies that fail to meet the targets will face financial penalties.
The mandate is forcing automakers to shift production away from gasoline and diesel engines. Many are retooling factories, changing supply chains, and investing heavily in battery and software technologies. This shift is one of the largest transitions the industry has faced in decades.
At the same time, the mandate is creating pressure in other parts of the vehicle sector. Companies that build parts for traditional engines with fuel systems or exhaust components are seeing lower demand. Independent repair shops may also be affected, since EVs require less maintenance and rely more on specialized systems.
In Canada, EV adoption is growing, but not yet fast enough to match the targets. In 2024, just under 15 per cent of new vehicles registered in Canada were zero-emission. Sales were highest in Quebec and British Columbia, where provincial rebates and charging infrastructure are more developed.
Charging infrastructure remains uneven. By early 2025, Canada had just over 33,000 public charging ports, well below the federal target of 84,500 by 2029. Outside major urban centres, many smaller communities and long stretches of highway still lack fast-charging access, making long-distance EV travel impractical in some areas.
Affordability adds another layer of complexity. EVs tend to cost more upfront than gas-powered models. When the federal EV rebate program temporarily ran out of funding in early 2025, buyers lost access to up to $5,000 in purchase incentives, adding pressure at a time of high interest rates and inflation.
Around the world, other countries are facing similar challenges. The European Union is moving toward a full ban on new combustion engine sales by 2035. China continues to lead in EV sales, with more than 11 million electric vehicles sold last year. With global supply chains shifting toward battery production and electric drivetrains, Canadian automakers must adapt quickly or risk being left behind.
The global shifts are adding pressure on Canadian automakers to stay competitive. To meet local and international rules, carmakers must now build more electric models, adjust pricing, and ensure battery supply, all while keeping costs under control.
In the years ahead, only time will tell whether the electric vehicle mandate stays on track or faces growing public pushback. As more Canadians weigh the costs, benefits and practical challenges of going electric, future market response and political pressure may yet influence how the EV transition unfolds.
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