Yahoo Finance Canada to roll out EV credits for automakers; fossil fuel sales to end in 2035
Ottawa’s plan for zero-emissions vehicles (ZEVs) to make up 100 per cent of new car and truck sales by 2035 includes incentives for automakers to build chargers and bring new models to Canada sooner.
Federal Environment Minister Steven Guilbeault unveiled the final version of the “Electric Vehicle Availability Standard” on Tuesday. The policy includes targets unveiled last December calling for all new cars, SUVs, and pick-up trucks sold in Canada to be ZEVs by 2035.
The ZEV category spans battery electric, plug-in hybrid, and hydrogen models. A 20 per cent sales target kicks in beginning in the 2026 model year, rising annually to 60 per cent by 2030.
British Columbia and Quebec already have comparable provincial sales targets in place.
According to Statistics Canada, ZEVs accounted for 12.1 per cent of new vehicle registrations in the third quarter of 2023. The figure represents an all-time high in market share for the category.
While sales have climbed in recent quarters, consumers have complained of long wait times at dealerships to buy electric models, unequal distribution of chargers across the country, as well as higher prices compared to comparable gasoline and diesel-only models.
“The standard tackles one of the main barriers to people buying EVs, the limited availability and long wait times. We will do this by ensuring more electric vehicles come to the Canadian market instead of the U.S. or other markets that have similar targets,” Guilbeault told reporters at a press conference in Toronto. "It ensures Canadians have access to our fair share of the global supply."
He adds that ZEVs are often cheaper to maintain and fuel, and prices are coming down.
Under the policy announced on Tuesday, automakers will earn credits for ZEVs offered for sale in 2024 and 2025. Surplus credits can be banked or traded, and will carry forward for up to five model years.
Companies will also be able to obtain credits by investing in charging infrastructure. Eligible projects must include new, fast-charging stations, which must stay operational for five years. The government says one credit can be obtained for every $20,000 invested, subject to certain price limits.
Guilbeault says non-compliant companies will face fines from Environment and Climate Change Canada.
Treasury Board president Anita Anand called the plan to phase out fossil fuel vehicle sales a "game-changer" at Tuesday's media event at Toronto's George Brown College, adding that the federal government must lead by example by transitioning its fleet of vehicles.
"We'll be incentivizing companies to do even more by providing credits for charging investments made by automakers, and adding predictability for investors in charging services," she said.
In a statement on Tuesday, the Canadian subsidiary of Hyundai Motor Company called the policy "a step in the right direction." However, the South Korean automaker warns improved vehicle availability is only part of what's needed to meaningfully boost ZEV sales.
"In order to meet the government's targets, a dedicated investment in charging infrastructure is necessary, especially for Canadians living outside of urban centres," said Don Romano, president and CEO of Hyundai Auto Canada.
Electric Mobility Canada hails the policy as a win for Canadians. The national advocacy group says it's no coincidence that Quebec and B.C., where ZEV sales regulations have been in place for some time, lead the nation in sales.
"They win by looking forward to more choice, less wait time and better prices," president and CEO Daniel Breton wrote in a news release on Tuesday. "The Canadian economy and the EV ecosystem win because it will ensure EVs built in Canada are available to Canadians. It will also ensure market predictability for Canadian businesses, not to mention public and residential charging infrastructure."
Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.
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