Canada is set to mandate that all newly manufactured vehicles must be zero-emission by the year 2035.

Automakers are resisting, arguing that the objective is not attainable given the higher cost of electric vehicles and the fragmented state of the charging infrastructure.

Canada is set to enforce a requirement that all new cars be zero-emission by 2035 in an effort to reduce its reliance on fossil fuels. Environment Minister Steven Guilbeault unveiled the federal government’s plan on Tuesday, which mandates auto manufacturers to increase the proportion of fully electric or plug-in hybrid vehicles sold in the coming years.

“We are at a critical juncture,” he stated, noting that the demand for electric vehicles in Canada has historically surpassed the available supply.

The Electric Vehicle Availability Standard will necessitate that 20% of vehicles sold in 2026 be either fully electric or plug-in hybrids. This percentage will rise to 60% by 2030, and by 2035, all vehicles offered for sale in Canada must be zero-emission. Emergency vehicles will be exempted.

Automakers that do not satisfy the requirements of the legislation will be able to purchase credits, valued at C$20,000 (£11,800) each, from other manufacturers that exceed their targets or have invested in charging station infrastructure. Companies may only offset a maximum of 10% of their total compliance.

The automotive industry has pushed back against these regulations, contending that the goals set by Ottawa are impractical due to the higher cost of electric vehicles and the fragmented nature of the charging infrastructure throughout the country. To address concerns, plug-in hybrids capable of driving at least 80km solely on electric power before switching to fossil fuel will be permitted for sale as zero-emission vehicles.

The guidelines, initially announced in 2021 and updated on Tuesday, represent a federal government endeavor to catch up to European nations and the United States, which have implemented various sales or emissions requirements aimed at promoting the adoption of electric vehicles, under pressure from environmental organizations. The current plan of the European Union aims to reduce automotive emissions by 55% from 2021 levels by the end of the decade and ultimately achieve zero emissions by 2035.

Based on recent sales data, Canada has a long way to go in order to meet its objectives. According to recent statistics from Statistics Canada, slightly over 10% of new vehicles sold in the first nine months of this year were electric, which is about half of what would be required under the new mandate in 2026.

However, in regions that already have regulations similar to those proposed by the federal government, these figures are significantly higher. In 2020, both Quebec and British Columbia implemented sales targets for zero-emission vehicles and swiftly surpassed them, years ahead of schedule.

In Quebec, 20% of new cars are electric, while in British Columbia, this figure rises to 25%, according to Statistics Canada.

Both provinces, which offer additional financial incentives to buyers, achieved their targets ahead of schedule. Ontario, the largest vehicle market in the country, terminated its provincial incentives when Premier Doug Ford was elected in 2018.

Moreover, in recent months, Canada also announced substantial subsidies for battery production facilities. As per the parliamentary budget officer, incentives for Northvolt, Stellantis, and Volkswagen battery plants will amount to C$43.6bn ($32.7) by 2033.

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