Canada Scraps EV Mandate, Boosts Incentives

Canada is abandoning its national electric-vehicle sales mandate, opting instead for enhanced incentives and stricter emissions standards. Prime Minister Mark Carney announced on Wednesday that the government will allocate C$2.3 billion for individual and business EV purchase or lease incentives, with up to C$5,000 available per vehicle.

An additional C$1.5 billion has been dedicated to expanding the EV charging network. The government also plans to provide up to C$3.1 billion to support the domestic auto manufacturing sector in its transition to electric vehicles, emphasizing a focus on results and reduced industry burdens.

This policy adjustment follows a similar move by the European Commission to ease combustion-engine car phase-out rules due to slower consumer adoption. Canada aims for 75% EV sales by 2035 and 90% by 2040 through its updated strategy, which replaces a 2026 mandate requiring 20% emissions-free vehicle sales.

While automakers have welcomed the announcement, some environmental advocates have voiced concerns, labeling the change a "huge setback." The Canadian Vehicle Manufacturers' Association, however, praised the funding for incentives and charging infrastructure, anticipating continued EV adoption growth.