Through media briefs, we aim to provide useful factual and contextual information related to Canada’s clean energy transition. Please use this as a resource, and let us know if there are any topics that you would like to see for future media briefs.
U.S. tariff uncertainty, paused government rebates, and Canada’s relatively limited EV market have caused Canada’s EV transition to hit a snag: while EVs are projected to make up a record one in four new cars sold globally this year, Canadian sales fell 23% in the first quarter and 34% in the second compared to last. Pointing to this slowdown, Honda and others have delayed their Canadian EV production plans.
The EV Availability Standard, designed to boost domestic competition by encouraging automakers to supply more zero-emission models over time, was set to take effect with the 2026 model year but has now been paused for review. As the federal government evaluates the policy, this brief explores what it is, how similar standards work elsewhere, and how Canada’s version could be adjusted to expand affordable choice for Canadian drivers.
What is it?
- The EV Availability Standard is a consumer-first policy that requires carmakers to sell an increasing share of electric vehicles in Canada. Its purpose, as its name suggests, is to incentivize automakers to make available better and more affordable zero-emission options over time in order to meet specified targets (originally starting from 20% for the 2026 model year, with interim targets before reaching 100% by 2035). The standard is currently paused for review, meaning the 2026 target does not currently apply.
How does it benefit Canadians?
- The EV Availability Standard helps Canadians access the best makes and models available globally by incentivizing carmakers to prioritize the Canadian market when deciding where to send their EVs.
- For instance, Canada will be the only market in North America to get Kia’s new EV5. Drivers in the U.S. will not be able to buy one.
- It also helps drive down the average price of EVs in the country by encouraging a greater supply of lower-priced models to meet more of the market.
- One 2022 study by Environmental Defence finds that Canada’s EV Availability Standard would reduce the median price of electric vehicles by 20% in 2035.
- A 2025 market survey of major metro regions in the country by Clean Energy Canada and Abacus Data finds that most Canadians are unwilling to spend more than $40,000 on a new EV.
Does it work?
- Jurisdictions with EV sales regulations in place tend to have significantly higher levels of EV adoption and regularly get the newest makes and models before others.
- In 2024, EVs accounted for 33% of new car sales in Quebec and 23% of new car sales in B.C., compared to the national average of 15% (and 8% in Ontario). The Fiat 500e, Jeep Wagoneer S, and even the Ontario-built electric Dodge Charger were made available for purchase exclusively in Quebec and B.C. before other provinces. Both provinces have had legislated EV sales regulations in place, respectively, since 2016 and 2019.
- Global findings are similar. One 2021 U.S.-focused study finds that states with EV mandates have more models available than those without. Meanwhile, the EU—which has tailpipe emission standards that are so stringent that they effectively act as a ZEV mandate—has many more EV models on offer than any other major Western market (a recent Clean Energy Canada analysis finds that the EU has 21 EV models available under the price point of $40,000 Canadian, while Canada only has one). China’s ZEV mandate has also significantly boosted domestic sales and model availability (nearly 60% of all vehicle models on offer today are electric).
How does it differ from tailpipe emission standards? Could Canada achieve its goals via tailpipe emission standards instead?
- Some have suggested Canada’s U.S.-aligned tailpipe emission standards could alone achieve similar goals. While that may have been possible (U.S. emissions standards are reasonably ambitious), soon there will very likely not be any U.S. standards for Canada to align with.
- The Trump administration is in the process of trying to scrap its standards as well as the EPA’s authority to regulate greenhouse gas emissions altogether. As a result, any calls from industry that Canada should “align with the U.S.” would mean we do nothing to regulate emissions from passenger vehicles.
- Canada’s EV Availability Standard, prior to its recent pause, stood as the only sure policy Canada had to shape the country’s vehicle mix beyond 2026.
Does it include a ‘$20K tax on gas cars’?
- No. This frequently misrepresented figure comes from a part of the regulation that allows carmakers to count investments in charging infrastructure as credits towards their EV targets. For each $20,000 investment in new fast-chargers, carmakers can earn one credit. Carmakers can only use this option to meet a maximum of 10% of their EV target in any given year. Charging investments are a compliance flexibility, not a penalty or requirement. Under the federal regulation, carmakers are not subject to any defined monetary fines for failing to meet their EV sales targets.
What are other ways carmakers can meet their targets?
- Besides charging investment credits (see above), carmakers have many other ways to meet EV sales targets under the policy.
- Those already selling EVs in the model years preceding any sales requirements (2024, 2025) can earn “Early Action Credits” they can use to meet future requirements.
- Similarly, carmakers can exceed their EV quotas in any given year and “bank” those credits for use in future years or sell them to carmakers who need them.
- Carmakers are also granted a grace period of three years—that is, if a carmaker falls short of its target in any given year, it has three years to make up that deficit by selling more EVs than it needs to in future years. This means that, if the first year of requirements will now be 2027, carmakers could choose to not sell a single EV until 2029.
- B.C. and Quebec are jurisdictions where such flexibilities have proven successful. Despite both provinces setting more ambitious targets than Canada’s (26% and 33% by 2026), carmakers have never fallen out of compliance in either province.
- In Quebec, for example, the EV credit market is so oversupplied with credits carmakers earned between 2014 (when Early Action Credits first became available) and 2023 that carmakers would be able to meet their total combined 2024 targets even if they didn’t sell a single EV that year.
Does it ban all sales of vehicles with a gas tank?
- No. New plug-in hybrid electric vehicles (vehicles with a gas tank and an external plug) are still allowed to be sold under Canada’s EV Availability Standard.
- Used gas-powered vehicles can also be sold on the secondhand market (54% of all vehicle sales in 2022 were of used vehicles) long after the 100% sales requirement kicks in in 2035. This policy covers only new vehicle sales, not used.
Is EV demand in Canada cooling?
- Canadian EV sales have, on average, increased by nearly 50% each year since 2020, compared to 2% for exclusively fossil-fuel-powered vehicles. And before the recent series of pauses to different government rebates, Canada’s nationwide EV sales share had climbed to a record 18% in the final quarter of 2024 or 15% for the full 2024 year (refer to graph).
- While 2025 EV sales in Canada have slowed, this is not necessarily indicative of cooled demand. Rather, the federal, B.C. and Quebec rebates were all paused earlier this year, keeping would-be buyers waiting on the sidelines to see if rebates will be brought back.
- Quebec restarted its rebate program April 1, 2025, and EV sales in the province in that quarter nearly doubled from the previous.
- A nationwide poll by Clean Energy Canada and Abacus Data conducted September 2025 found that the overwhelming majority of those open to buying an EV as their next vehicle would wait for the federal rebate to return before making a purchase.
- Another recent poll by Clean Energy Canada and Abacus Data finds that 45% of Canadians are still inclined to get an EV as their next vehicle, with interest higher in certain regions like Quebec (55%) and B.C. (53%), as well as among young people aged 18 to 29 (57%) and 30 to 44 (52%).
Has the global EV transition slowed?
- No.While the pace of growth itself has slowed—a normal sign for a maturing market—global EV sales are still rising. In the first half of 2025, EV sales increased by 28% globally compared to the same period last year (3% in North America, 26% in Europe, 32% in China, and 40% in the rest of the world).
- The International Energy Agency expects more than one in four new cars sold worldwide to be an EV this year.
Should traditional hybrids be included?
- Conventional hybrids can only be run on fossil fuels, emit significantly more greenhouse gases than EVs, and also don’t offer the same savings benefits.
- Driving a Honda Civic hybrid in Quebec only reduces one’s fuel consumption by about 25% compared to a regular gas-powered Honda Civic. In contrast, driving a fully electric vehicle eliminates fuel consumption entirely by swapping it out for electricity, saving drivers thousands of dollars in avoided fuel and maintenance costs every year. In Quebec, the Honda Civic Hybrid will also emit hundreds of times more greenhouse gases per kilometre than the Hyundai Ioniq 6 Long Range (a battery-EV).
- Including conventional hybrids would also undermine a number of the standard’s objectives—improving EV availability and affordability, stimulating investment in transformative battery electric vehicle technology, and providing market certainty for charging station providers looking to build out Canada’s charging network (because conventional hybrids don’t have a plug).
How will the EV Availability Standard—and its pause—impact Canada’s auto industry?
- The standard encourages Canada’s auto industry to align with global markets, many of which are also rapidly transitioning to EVs (the U.K., EU, and China all have their own versions of the policy with even higher targets). Without an accelerated transition, Canada’s auto sector will quickly become even more uncompetitive.
- Pausing the regulation, as the Prime Minister has, voids the 2026 requirement and creates demand uncertainty for the auto industry, potentially stalling critical investments and delaying the transition. Any further delays in policy implementation would exacerbate this uncertainty and cause Canada to fall even further behind.
Doesn’t this policy only benefit Tesla?
- No. Under the federal EV Availability Standard, carmakers can currently only earn Early Action Credits for EV sales above a set threshold. These credits are not tradeable—they can only be used by the automaker that earned them. So far, no one has bought credits from Tesla (or any other company) under the federal policy.
- Under Quebec’s policy, where credit trading is already active, General Motors and Hyundai have also sold credits alongside Tesla.
Do U.S. tariffs make the EV Availability Standard targets harder to meet?
- Only 15% of EV models offered in Canada are affected by the U.S. tariff. The tariffs are only applicable if the vehicle is assembled in the U.S., and the vast majority of EV models in Canada are assembled in non-US countries such as Germany, Belgium or South Korea. There are also tariff exceptions for automakers that operate assembly plants in Canada, which include Ford, General Motors, Honda, Stellantis and Toyota. As such, nearly all automakers are spared.
- Only several manufacturers, like American-only Tesla, Rivian, and Lucid—which collectively represent only 9 EV models in Canada—are impacted by tariffs.
Is Canada’s public charging network sufficient to support our EV targets?
- Up to 90% of charging happens at home (where it’s the cheapest and most convenient), which is why the real question is how to get more home charging into multi-unit buildings. But public charging is nevertheless still important for road trips and those who regularly drive above-average distances—and Canada’s public network is growing rapidly to meet anticipated demand: over the last year, the network grew by about 25%, with tens of thousands of additional chargers already planned and funded.
- Keeping the EV Availability Standard in place is one of the best ways to support private sector investment in Canada’s public charging network, as utilities utilize EV targets to help project electricity demand, developers rely on them when deciding whether to include EV charging in new buildings, and charging station providers use them to determine whether the business case for charging investments in certain areas exists.
- A recent PBO report finds that the policy would alone unlock enough private sector investment to grow Canada’s charging network to just short of where it needs to be by 2030.
Should the standard be updated, and if so, how?
- The federal government’s decision to pause the Electric Vehicle Availability Standard is an opportunity to adjust the policy to better achieve its primary objectives of increasing consumer choice and EV availability.
- Scrapping the policy would put Canada out of line with global markets and lock Canadians out of the affordability benefits of EV ownership.
- Updating the policy with additional compliance pathways, such as with extra credits for vehicles under a certain price point, could help incentivize automakers to introduce lower-cost EVs.
