The road ahead for Canada’s transition to electric vehicles is not without challenges, but the opportunity remains clear. While uncertainty lingers around United States trade policies, the question for Canada is how to drive forward.
The global shift to electric vehicles (EVs) is accelerating. Staying the course will bring economic benefits, lower transportation costs, and improve energy security. With smart policies in place, Canada can ensure the continued growth of its EV industry, and secure its place in the future of clean transportation.
Beyond positioning Canada as a global leader, the shift to EVs offers tangible benefits for consumers, businesses, and workers. Lower operating costs mean drivers and fleet operators will save thousands of dollars over the lifetime of a vehicle. A stronger domestic EV industry will create stable, well-paying jobs across the supply chain, from mining and battery production to manufacturing and maintenance. Investing in EVs will also enhance Canada’s energy security by reducing reliance on imported oil, and leveraging our abundant domestic electricity resources instead.
Keeping EVs affordable and Canada competitive
Now more than ever, Canada must chart its own path. Policies that reduce costs for consumers and provide certainty for manufacturers will be key to keeping transportation affordable, and strengthening our auto sector.
The federal government has taken significant steps to grow Canada’s EV industry by helping buyers, and by supporting manufacturers through tax incentives, funding for manufacturing and placing tariffs on Chinese-made EVs. As an auto manufacturing hub, Canada benefits from these measures—they strengthen the EV supply chain, and help keep domestically produced vehicles within reach for Canadians. Positioning Canadian manufacturers to reduce reliance on the U.S., and become globally competitive means going all-in with EVs as they gain momentum in global markets.
A strong EV market requires a mix of measures to help Canada diversify
There are multiple approaches Canada can take. Sales targets, incentives, and supply-side measures to bolster market certainty in EVs all play a role. For example, the federal government has introduced EV sales targets that require auto manufacturers and importers to meet annual sales thresholds for zero-emission vehicles. Canada’s EV market is well on its way to achieving those targets—EVs were 18.9 per cent of all light-duty vehicle sales in the fourth quarter of 2024, just 1.1 percentage points shy of the 2026 target of 20 per cent. This kind of market certainty allows automakers to plan their investments, ensures buyers have access to EVs, and supports the development of a strong resale market.
Other measures, such as greenhouse gas emissions regulations for medium- and heavy-duty vehicles (MHDVs), will accelerate adoption and stimulate investment across Canada’s auto industry. Unlike light-duty vehicle manufacturing, MHDVs have strong Canadian-based manufacturers, with companies like Solus Advanced Materials opening a plant in Quebec. Clear and ambitious standards in this sector will help create a stable investment environment, allowing Canadian manufacturers to lead in producing electric trucks and buses.
Seizing Canada’s EV opportunity
Despite current threats from the U.S., Canada’s auto sector must take this opportunity to position itself as a global leader in the EV transition, including manufacturing, infrastructure, and technology. The shift to EVs is well underway in global markets, and Canada must keep pace. Strengthening our domestic EV supply chain will reduce reliance on the U.S., ensure stable jobs for Canadian workers, and make EVs more affordable and accessible.
The key is to move swiftly. By implementing the right policies, Canada can secure investment, create good jobs, and build a strong and competitive EV industry for years to come. The government has already laid the groundwork with proven policies, and we must continue on this path to maintain momentum.
