Canada to mandate new vehicles with zero-emission by 2035

Canada aims to mandate that all newly manufactured vehicles be zero-emission by 2035 in an effort to reduce the nation’s reliance on fossil fuels. Steven Guilbeault, the Minister of the Environment, revealed the government’s plan, compelling car manufacturers to increase the proportion of fully electric or plug-in hybrid vehicles in their sales in the upcoming years.

Guilbeault emphasized the critical juncture, stating that the demand for electric vehicles (EVs) in Canada has consistently exceeded the available supply.

Under the Electric Vehicle Availability Standard, the requirement stipulates that one-fifth of vehicles sold in 2026 must be fully electric or plug-in hybrids, escalating to three-fifths by 2030. By 2035, all vehicles offered for sale in Canada must be zero-emission, with exemptions for emergency vehicles.

Manufacturers falling short of the set targets can purchase credits, valued at C$20,000 each, from counterparts surpassing their goals or investing in charging infrastructure. However, companies can only offset a maximum of 10% of their overall compliance.

The automotive industry has expressed reservations about the regulations, arguing that Ottawa’s objectives are impractical due to the higher costs of electric vehicles and the uneven distribution of charging infrastructure throughout the country. To address concerns, plug-in hybrids capable of traveling at least 80km on an all-electric charge before transitioning to fossil fuels will qualify for sale as zero-emission vehicles.

These guidelines, initially introduced in 2021 and revised recently, represent the federal government’s attempt, prompted by environmental pressures, to align with European nations and the US, which have implemented diverse sales or emissions requirements to stimulate electric vehicle adoption. The current European Union plan aims to reduce automotive emissions by 55% from 2021 levels by the end of the decade and achieve zero emissions by 2035.

Despite the ambitious targets, recent sales data indicates that Canada has a considerable distance to cover. In the first nine months of this year, slightly over one-tenth of new vehicles sold were electric, falling short of the new mandate’s requirements for 2026.

However, regions with regulations similar to the federal proposal, such as Quebec and British Columbia, have exceeded their targets, with 20% and 25% of new cars being electric, respectively, in 2020.

These provinces achieved their goals ahead of schedule, aided by additional financial incentives for buyers. Ontario, the country’s largest car market, eliminated its provincial incentives in 2018.

In recent months, Canada has also announced significant subsidies for battery production facilities, with incentives for Northvolt, Stellantis, and Volkswagen battery plants expected to cost C$43.6 billion by 2033, according to the parliamentary budget officer.

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