Federal Government Plans to Mandate EV Sales in 2026

Pretty soon, all vehicles sold in Canada will need to be electric.

In a series of draft regulations proposed by Environment Minister Steven Guilbeault on Wednesday, all auto manufacturers and importers selling cars in Canada will need to abide by sales targets mandating that one-fifth of all passenger vehicles and trucks are powered by electricity by 2026. By 2030, that mandate will increase to 60% of all vehicle sales, and then come 2035, all car sales in Canada will need to be electric.

For those manufacturers failing to meet the new standards, they are to be subjected to penalties as per the Canadian Environmental Protection Act. The government will track the sales via the issuance of credits for each vehicle sold. Guilbeault’s plan is part of the Liberals’ 2021 election promise to cut back greenhouse gas emissions to at least 40% below 2005 levels.

Canada currently has sales targets for electric vehicles, but they aren’t enforced and the federal government wasn’t prompting automakers to boost EV production. The newly proposed mandate, however, will be enforced across the country, whereby fully electric passenger cars and trucks will be worth a larger credit as opposed to plug-in hybrid models, which the government concedes will likely be in greater demand in rural and northern regions.

Still, the federal government still has a long road ahead before the first target is reached in 2025. According to Statistics Canada, electric vehicle sales— including hybrid models— accounted for only 7.2% of all Canadian car sales between January and May 2022. The figure stood at 5.2% in the prior year.


Information for this briefing was found via CTV News and Statistics Canada. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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