Ottawa, July 6, 2025 — Canada’s ambitious electric vehicle (EV) mandate is facing growing headwinds amid declining EV sales and rising trade tensions, particularly with China. The government’s plan, which aims for 100% zero-emission vehicle sales by 2035, is being tested as automakers warn of financial strain due to tariffs and lukewarm consumer demand.

Industry analysts say that while the EV push is critical to meeting climate targets, the current environment may require policy adjustments rather than a full rollback. Former Bank of Canada governor and current climate envoy Mark Carney has hinted at possible flexibility within the policy framework.

“Carney understands the economic realities,” said energy policy expert Sarah Benoit. “It’s unlikely the mandate will be scrapped, but expect delays or tweaks in compliance timelines.”

Canada’s decision to impose tariffs on Chinese EVs, in line with U.S. and EU measures, has limited access to more affordable models, further complicating adoption. Domestic manufacturers also face challenges ramping up production and managing battery supply chains.

Some environmental groups have expressed concern that weakening the EV mandate could derail emissions targets, while auto industry leaders push for a middle path that ensures both sustainability and affordability.