The Canadian government is reportedly halting the Electric Vehicle Availability Standard (ZEV) set by former Prime Minister Justin Trudeau, as it reevaluates the policy on EV adoption targets.
According to sources cited by CBC Canada on Friday, the plan that requires automakers to reach 20% of zero-emission vehicle sales by 2026, progressing towards 100% in 2035, will be paused for 60 days.
The move is one of the several measures that Prime Minister Mark Carney’s government is announcing to help automakers navigate the tariff climate, as the US implements country-specific tariffs on imports.
Earlier this year, US Commerce Secretary Howard Lutnick said that auto parts under the United States-Mexico-Canada Agreement (USMCA) “will not carry tariffs, no change in that approach,” despite the 25% tariff already imposed on auto parts.
Auto parts that meet USMCA rules don’t have to pay the 25% tariff.
However, Canadian-manufactured vehicles that don’t qualify for duty-free trade under USMCA had their tariff raised from 25% to 35%.
Several US automakers rely on production in Canada, like Detroit automakers General Motors and Ford.
GM currently builds 52% of its vehicles sold in the US at domestic facilities, while 30% come from Canada and Mexico and 18% from other regions. Ford’s US production stands at 77%, with 21% sourced from Canada and Mexico and 2% from other regions.
In May, Reuters reported that production in GM’s Oshawa assembly plant had been cut back due to low demand and trade-related issues.
Carney, who became Prime Minister in March, is reversing several policies from the Trudeau Administration, most of them due to the trade war that broke out in the past few months.
He has removed many retaliatory tariffs on US products and canceled a new tax on digital services after former President Trump objected to it.
Carney also eliminated the carbon tax on consumers’ fossil fuel use. Meanwhile, the auto industry has been lobbying for months against the EV mandate, claiming the targets are unrealistic and could threaten jobs.
Under the electric vehicle mandate, manufacturers who didn’t meet the sales targets would have had to either limit the sale of traditional gas-powered cars or purchase credits from companies like Tesla, similarly to what happens in the US.
