Automakers urge Prime Minister Carney to repeal zero-emission vehicle rule

Auto sector chief executives urged Prime Minister Mark Carney to repeal federal regulations requiring one in five vehicles sold starting in 2026 to be zero-emission models. The CEOs of Ford Motor Company of Canada, General Motors of Canada Co., and Stellantis Canada met with Mr. Carney in Ottawa amid Canada-U.S. trade war discussions. Automakers warn of challenges in meeting the zero-emission vehicle (ZEV) mandate targets due to declining electric-vehicle sales in Canada this year.

Brian Kingston, president of the Canadian Vehicle Manufacturers’ Association, emphasized the importance of removing the ZEV mandate, stating that it is damaging and redundant. The association appreciated the discussion with the Prime Minister and aims to collaborate to protect the auto industry. The federal ZEV sales mandate requires a percentage of Canadian car sales to be powered by battery, fuel cell, or plug-in hybrid systems, increasing to 100% by 2035.

Automakers express concerns about meeting the targets, suggesting that consumers should determine available vehicles. The program offers credits for exceeding ZEV targets, which can be traded or banked for future mandates. Automakers fear limitations on internal combustion vehicles or purchasing credits to comply. Flavio Volpe of the Automotive Parts Manufacturers’ Association highlighted the impact of the trade war on Canadian vehicle production.

Canada faces tariffs on steel, aluminum, and autos, affecting the auto industry. EV sales in Canada declined this year, influenced by the loss of incentives and high prices. The federal government halted EV incentives but plans to reinstate them. Quebec and Ontario have made changes to their incentive plans. In the U.S., President Trump eliminated the EV mandate and federal support for buyers, impacting car manufacturers’ strategies.

Automakers are reevaluating production and investment plans due to the drop in EV demand. Honda Canada postponed an EV project, Stellantis NV delayed electric vehicle production, and Ford Motor Co. shifted focus to gas-powered trucks. The industry faces challenges amid changing regulations and market demands.