Ottawa, July 7, 2025 – The Europe Today: Faced with mounting pressure from U.S. tariffs and dwindling vehicle exports, the CEOs of Canada’s three largest automakers have called on Prime Minister Mark Carney to scrap the federal government’s zero-emission vehicle (ZEV) mandate. In a high-stakes meeting in Ottawa this week, the executives warned that maintaining the current policy could threaten thousands of Canadian jobs and further destabilize an industry already reeling from cross-border trade tensions.
The automakers’ plea comes as Canadian exports of light-duty vehicles to the U.S. dropped 23 per cent year-over-year in April, according to Statistics Canada, largely due to ongoing U.S. tariffs on steel, aluminum, and vehicles. Industry leaders argue that these pressures, combined with a declining domestic and international market for electric vehicles, make it nearly impossible to meet Canada’s ambitious EV targets.
Under the ZEV mandate, 20 per cent of all new vehicles sold in Canada must be zero-emission by 2026, increasing to 60 per cent by 2030 and reaching 100 per cent by 2035—a core component of Canada’s emissions reduction plan.
Brian Kingston, president and CEO of the Canadian Vehicle Manufacturers’ Association, said the targets are now unrealistic. “The ZEV mandate, as it stands, is not achievable given current market conditions, infrastructure challenges, and the impact of American trade policies,” Kingston said after the meeting.
Adding to the strain is the recent rollback of EV incentives in both Canada and the United States. In April, the Canadian government ended its ZEV rebate program, which had offered up to $5,000 toward the purchase of an electric vehicle. South of the border, U.S. President Donald Trump not only eliminated his country’s ZEV mandate in January, but also moved to end the $7,500 federal EV tax credit months ahead of schedule.
“Without coordinated incentives or a growing export market, there’s simply no way for Canadian manufacturers to hit the 20 per cent target next year,” said Flavio Volpe, president of the Automotive Parts Manufacturers’ Association.
The decline in demand is already evident. ZEV sales in Canada were down 28.5 per cent in April compared to the same month in 2024, with market share sitting at just 7.5 per cent.
A Political Crossroads for Carney
Prime Minister Carney now faces a dilemma that could shape both his economic and environmental legacy. Last week, in a gesture to ease U.S.-Canada trade tensions, Carney rescinded Canada’s proposed digital services tax, earning praise from Washington.
Observers are questioning whether he might take similar action with the EV mandate.
“This is a classic political wedge,” said Christopher Cochrane, Chair of the Political Science Department at the University of Toronto. “Carney is stuck between ambitious climate goals and a domestic industrial base that is bleeding under the weight of a trade war. If he’s going to backtrack, this may be his best window to do it.”
Removing or softening the ZEV mandate could alleviate pressure on Canada’s automakers and improve trade negotiations with the U.S. However, doing so could alienate environmental groups and climate-conscious voters who see EV adoption as a critical pillar in the fight against global warming.
With the December 2025 target for full ZEV policy rollout approaching and the next federal election cycle looming, Carney’s decision may determine not just the future of Canada’s auto sector—but his own political trajectory.
