Canada Postpones 2026 Electric Vehicle Mandate by One Year

The Canadian government has announced a delay in its sales mandate for electric vehicles (EVs), moving the target date from 2026 to July 2027. The original mandate required that 20% of all new vehicles sold in Canada be electric by 2026. This decision comes amidst challenges in the EV market, particularly concerning consumer adoption and infrastructure readiness.

Prime Minister Mark Carney has initiated a 60-day review of the EV program to enhance its cost-efficiency. This review aims to address the barriers that have hindered the uptake of electric vehicles in the country. Historically, Canada saw EV sales reach 18% of the market in 2024, but this number plummeted by more than half following the cessation of a federal rebate program, which offered consumers $5,000 for purchasing electric vehicles. The rebate was paused in January 2025 and has yet to be reinstated, despite a commitment from Julie Dabrusin, Minister for Environment and Climate Change, to revive it.

The delay in the mandate has been welcomed by the Global Automakers of Canada, which noted that the federal government acknowledges the slower-than-expected consumer adoption of EVs. The association highlighted that transitioning to electrified vehicles must align with consumer demand, which is currently affected by the higher initial costs of EVs and the insufficient charging infrastructure.

Industry Response and Broader Market Trends

In the United States, similar trends are unfolding as EV demand slows, prompting General Motors (GM) to temporarily halt production of its largest electric models. The company has ceased operations for the GMC Hummer and Cadillac Escalade IQ at its Factory Zero in Detroit-Hamtramck. The shutdown, effective from early September 2025, is expected to last until October 6, 2025, as the company seeks to align production with market demand.

The decision to cut back on production comes as dealers report excessive inventory levels, indicating that consumer interest has not matched production rates. GM is also planning to temporarily pause the assembly of the Cadillac Lyriq and Vistiq for one week each in October and November 2025, with a complete halt during December. Additionally, the plant near Kansas City, which is set to produce a new version of the Chevrolet Bolt EV, will operate at reduced capacity with only one shift for the first five months of 2026.

This production cut, along with the cautious approach to the EV mandate in Canada, reflects broader challenges facing the electric vehicle market. Factors such as fluctuating consumer preferences, economic pressures, and changes in government incentives are shaping the landscape for manufacturers and consumers alike.

As Canada navigates this transition in electric vehicle policy, the focus will remain on developing strategies that encourage consumer adoption while addressing cost and infrastructure challenges. The outcomes of the upcoming review of the EV program may significantly influence the future of the automotive industry in Canada and beyond.