The federal government’s plan to accelerate electric vehicle (EV) adoption in Canada is encountering skepticism from some automotive industry leaders, who argue the policy’s timelines and requirements may not align with current market conditions.
Brian Kingston, CEO of the Canadian Vehicle Manufacturers’ Association, outlined key challenges in a recent discussion with The Hub, emphasizing gaps in infrastructure, consumer demand, and regulatory alignment that could hinder the mandate’s success.
Here are five key takeaways from the discussion.
- Current targets do not match demand: EV sales in Q1 of 2025 are very low, at just 9.7 percent, nowhere near the 20 percent benchmark for all vehicle sales to be electric by 2026.
- Lacking the necessary infrastructure: The current charging infrastructure in Canada does not correspond to the federal government’s goals, with 40,000 public chargers needing to be built annually for the next 15 years, while only 37,000 currently exist.
- The economic fallout for automakers and consumers: The economic consequences of a rigid sales ratio could spell trouble, leading to higher prices, reduced supply, and plummeting profitability for dealerships and manufacturers.
- Regulatory misalignment with the U.S.: Kingston argues that trying to decouple our auto industry from the U.S. is not the move—ultimately only creating more challenges for Canada.
- Mandating technology vs. regulating emissions: By instituting an EV mandate, it may stifle further innovation in other emerging technologies, such as e-fuels.
1. Current targets do not match demand
The federal mandate requires 20 percent of all vehicle sales to be electric by 2026, escalating to 60 percent by 2030 and 100 percent by 2035. However, Kingston revealed that Canada is on track for just 9.7 percent EV sales in 2025—far below the first benchmark. To meet the 2026 target, sales would need to surge by 103 percent in a single year, an increase of approximately 183,000 EVs.
“It’s impossible. The market demand is simply not there,” Kingston stated. He dismissed the government’s argument that forcing supply would create demand, pointing to record-high EV inventories and over 100 models already available. “You can’t regulate demand, and you definitely can’t regulate a technology,” he added.
2. Lacking the necessary infrastructure
A critical barrier to EV adoption is the lack of charging infrastructure. According to Kingston, Canada currently has approximately 37,000 public chargers, but Kingston noted that the government’s own estimates call for 40,000 new chargers annually for the next 15 years—a target he called “massive” and unachievable at the current pace.
Compounding the problem are unresolved challenges with grid upgrades and clean electricity generation.
“If [the government] were truly serious about this, you’d have to have a plan,” Kingston said. The absence of such planning, he argued, raises doubts about the feasibility of the entire mandate.
3. The economic fallout for automakers and consumers
Kingston warned that the mandate’s rigid sales targets could trigger severe economic consequences. Automakers unable to meet the targets face two costly options: purchasing credits from companies like Tesla—which has profited heavily from such schemes—or restricting sales of internal combustion engine vehicles.
“If the 9.7 percent sales rate holds through next year, automakers would have to pull a million vehicles from the Canadian market to meet the government’s established ratio,” Kingston said. This would lead to higher prices, reduced supply, and plummeting profitability for dealerships and manufacturers. “That is an economic catastrophe,” he emphasized.
4. Regulatory misalignment with the U.S.
Canada’s auto industry is deeply integrated with the U.S., with over 90 percent of Canadian production destined for American markets. Kingston stressed that diverging from U.S. EV policies creates significant trade and operational challenges.
“Nobody comes to Canada to build an auto plant to service Canadians only,” he said. “We don’t have the economies of scale.” He urged alignment with U.S. regulations to maintain competitiveness, warning that a “go-it-alone approach” would harm the sector.
5. Mandating technology versus regulating emissions
Kingston criticized the federal government for mandating a specific technology (EVs) rather than focusing on emissions reductions. He noted that Canada already has emissions standards aligned with the U.S., which allow automakers flexibility in meeting targets through a mix of technologies, including hybrids, plug-ins, and improved gas engines.
The industry’s preferred approach is to “stick to regulating emissions,” he said. “Put a target out, and the industry will hit it. They always have.”
He warned that picking EVs risks stifling innovation in emerging technologies such as hydrogen fuel cells or e-fuels.
This analysis draws on a Hub video. It was edited using AI. You can access the full program here.
