Canada to roll out EV credits for automakers; fossil fuel sales to end in 2035

Canada to roll out EV credits for automakers; fossil fuel sales to end in 2035
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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.

Electric Vehicle Availability Standard

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.

ZEV Sales Targets

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.

Provincial Targets

British Columbia and Quebec already have comparable provincial sales targets in place.

ZEV Market Share Milestone

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.

Addressing Consumer Concerns

While sales have climbed, consumers have complained of long wait times, unequal charger distribution, and higher prices compared to traditional models. Guilbeault emphasized that the standard aims to address these concerns and ensure Canadians have access to a fair share of the global supply.

Policy Details

Under the policy, 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.

Credit Incentives

Companies can also obtain credits by investing in charging infrastructure. Eligible projects must include new, fast-charging stations operational for five years. One credit can be obtained for every $20,000 invested, subject to certain price limits.

Enforcement and Fines

Guilbeault stated that non-compliant companies will face fines from Environment and Climate Change Canada.

Government Fleet Transition

Treasury Board president Anita Anand called the plan a "game-changer" and emphasized the federal government's commitment to transitioning its fleet of vehicles. Incentives for charging investments made by automakers and predictability for investors in charging services are part of the plan.

Industry Response

The Canadian subsidiary of Hyundai Motor Company viewed the policy as a step in the right direction. However, it cautioned that improving vehicle availability is only part of what's needed to boost ZEV sales, emphasizing the necessity of dedicated investments in charging infrastructure, especially for Canadians outside urban centers.

Advocacy Group Perspective

Electric Mobility Canada hailed the policy as a win for Canadians. The national advocacy group noted that provinces with existing ZEV sales regulations lead in ZEV sales, providing more choice, reduced wait times, and better prices. The policy ensures EVs built in Canada are available to Canadians, contributing to market predictability for businesses and charging infrastructure development.

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