05Jan, 24 January 5, 2024
  • By evcharger

The Canadian federal government recently announced aggressive new mandates requiring automakers to transition to electric vehicle (EV) sales over the next decade. By 2026, 20% of all new passenger vehicles sold must be zero-emission, followed by 60% by 2030. Ultimately, the regulations stipulate that 100% of new passenger vehicle sales must be EVs by 2035. 

This mandate poses significant challenges for meeting demand as automakers are making efforts to ramp up EV production. Moreover, automakers will likely have to constrain sales of non-EV vehicles to comply with the minimum EV sales percentages. This article analyzes the potential impact provincially and over time-based on historical sales data and vehicle lifespan estimates.

Overview of Canada’s EV Sales Mandate

Canada’s zero-emission vehicle (ZEV) mandate includes incremental sales requirements for automakers:

  • 2026: Minimum 20% ZEV sales
  • 2030: Minimum 60% ZEV sales 
  • 2035: 100% ZEV sales

Automakers who fail to meet the minimum percentages will face financial penalties, providing a strong incentive to comply. 

The policy aims to ensure Canadians have fair access to EVs as global demand escalates. The government projects EVs will reach 40-45% of total vehicle sales worldwide by 2030. However, Canada hopes to secure an equitable EV supply as production scales up by setting firm requirements.

The regulations focus exclusively on new vehicle sales – both privately owned passenger vehicles and commercial fleets. They do not impact existing vehicles already owned by consumers and businesses.

Analysis Methodology 

This analysis aims to forecast the impact of EV sales requirements for automakers provincially over the phase-in period. A few key assumptions underpin the methodology:

New Vehicle Sales Forecast

  • New vehicle sales in each province are assumed to continue at 2023 levels throughout the phase-in period. This provides a straightforward baseline for analysis.
  • Commercial and passenger vehicle sales are combined as automakers must meet ZEV requirements across both categories. 

Existing Vehicle Population

  • The average age of vehicles on Canadian roads is ~9.3 years as of 2022. 
  • An equal number of new vehicles are assumed to replace retiring vehicles each year. 
  • Retiring vehicles are removed from the total vehicle population each year once they reach an average lifespan of 16 years.

EV Sales Capacity

  • EV production capacity will limit sales early in the phase-in period. As capacity grows, EV sales will reach mandated levels.
  • EV sales capacity is estimated based on current automaker expansion plans for North American facilities.

National EV Sales Projections

Automakers sold approximately 306,000 new vehicles across Canada in 2023. To meet the 2026 mandate, 20% of these sales – about 61,000 vehicles – must be EVs. By 2030, over 183,000 EVs must be sold, representing 60% of total vehicles. Moreover, all new sales must be EVs by 2035.

However, automakers project EV production capacity will lag these targets in the early years:

YearProjected EV Sales Capacity EV Sales TargetPercent Achieved
2026150,000306,000 * 20% = 61,000100%
2030350,000306,000 * 60% = 183,00053%

Projected EV sales capacity based on automaker expansion plans

This indicates EV supply will limit sales through 2030. Automakers will likely have to constrain non-EV sales during this period to comply with the minimum EV sales percentages. By 2035, the projected capacity aligns with the total vehicles sold today.

Provincial Forecasts

The analysis below summarises potential outcomes for each province over the phase-in period based on current sales levels and EV capacity growth.

British Columbia 

  • BC has sold the most EVs per capita to date, facilitated by provincial incentives and charging infrastructure investments.
  • With strong EV adoption already, BC auto sales could comply with the 2026 mandate solely via organic demand growth.  
  • However, limited early EV capacity from automakers may require constraining total vehicle sales in BC by 2030. Thus, electric vehicle sales will likely still fall short of the 60% target due to supply constraints.


  • EV sales in Alberta currently lag the national average at 6.5% of auto sales.
  • Achieving a 20% EV share by 2026 will require a 3x increase in EV sales based on current adoption rates. This will likely rely on constraining non-EV vehicle sales in Alberta before demand fully materializes.
  • Automakers may need to cut total Alberta auto sales in half by 2030 to comply with the 60% EV target given low organic EV demand growth and production capacity limits. 

Saskatchewan and Manitoba

  • EV sales in these provinces have been slower to develop, with EVs representing just 3% of current auto purchases.
  • Reaching a 20% EV share by 2026 would require nearly a 7x increase over current organic demand. Automakers will likely achieve this target primarily by suppressing non-EV sales.
  • To achieve a 60% representation of electric vehicles (EVs) in total auto sales in Saskatchewan and Manitoba through 2030, cutting sales of conventional vehicles by 70% is necessary due to restricted EV capacity.


  • As Canada’s largest auto market, Ontario will dictate national compliance with the ZEV mandate.
  • EV sales may grow sufficiently by 2026 to avoid limiting total Ontario auto purchases, aided by provincial rebates and charging investments.
  • However, automakers may still need to constrain non-EV sales by up to 40% in Ontario by 2030 given projected EV production capacity limits.


  • Quebec has led EV adoption in Canada, with EVs reaching 13% of sales in 2023.
  • Natural demand growth could allow Quebec to meet the 2026 target without suppressing total auto sales.
  • Production capacity constraints will still require cutting non-EV volumes by 2030. EV sales may fall short of the 60% target given supply limitations.  

Atlantic Provinces

  • Atlantic provinces have the lowest EV sales today, with EVs representing just 1.5% of current purchases.  
  • Reaching a 20% share by 2026 requires a 13x increase over current EV demand. This will mandate reducing Atlantic provinces’ non-EV sales.
  • Automakers may need to cut total Atlantic auto sales by 70% by 2030 to comply with the 60% EV target given low organic adoption and capacity constraints.

Vehicle Retirements 

As the vehicle fleet turns over through retirements, the ZEV mandate will have an amplified impact. By 2035, when no used internal combustion engine vehicles are available, consumers replacing retired vehicles will only have the option to purchase electric vehicles (EVs).

This means that EV sales must equal total new vehicle demand starting in 2035 – an estimated 475,000 units based on current retirement rates. Achieving this capacity 20 years faster than organic growth projections will prove extremely challenging for automakers without limiting new internal combustion engine sales leading up to 2035.

Impact on Overall Vehicle Population

The ZEV mandate only covers new vehicle sales and it will also influence the total size of Canada’s passenger vehicle fleet. With non-EV sales suppressed due to supply limitations, the overall fleet size may temporarily plateau or decline in the early years of the phase-in period. However, as expanded North American EV production capacity comes online, the vehicle population will return to growth by 2035 and beyond.

Key Takeaways  

Canada’s ZEV mandate sets immensely ambitious EV adoption targets for automakers. However, the policy will likely have profound near-term impacts:

  • EV production capacity constraints will require automakers to limit non-EV vehicle sales to comply with minimum EV percentages through 2030.
  • Provinces with the lowest current EV demand face the largest sales cuts for non-EV vehicles.
  • Consumers may have reduced vehicle choices until further EV model proliferation.
  • The total vehicle fleet size may temporarily shrink during the transition as EV supply limits new sales.

Automakers need to rapidly scale up electric vehicle production to successfully meet the increased demand under the accelerated timeline. This remains feasible but will require extensive investments in new North American facilities over the next decade.

Frequently Asked Questions

Q: How will the Canada EV mandate impact the used car supply?

A: The mandate only applies to new vehicle sales. However, as internal combustion engine cars are retired after 2035, no used models will be available either. This may increase demand and prices for used non-EV cars in the short term.

Q: What percentage of cars sold in Canada are electric vehicles?

A: Electric vehicles (EVs) represented 12.1% of new vehicle sales in Canada in the third quarter of 2023. This is up from 5.3% of total vehicle registrations in 2021, showing rapidly growing adoption. However, still a minority of overall auto sales, the 12.1% EV share in Q3 2023 indicates substantial momentum in the Canadian market. 

This growth has been facilitated by government incentives, expanding model availability, and rising consumer interest driven by environmental concerns. Automakers and policymakers expect EV sales to continue rising to meet Canada’s mandated target of 100% new zero-emission vehicle sales by 2035.

Q: Will EV supply be able to meet local demand in northern communities?

A: Expanding charging infrastructure to rural and northern regions will be critical as EV supply scales up. Automakers may prioritize EV allocation to southern markets early on until production and charging networks expand.

Q: How will the EV transition impact auto sector jobs?

A: The transition may temporarily reduce jobs supporting internal combustion engine production. However, expanding North American EV manufacturing will likely create new employment opportunities. Proactive retraining programs can help address labor market transitions.

Q: Will upfront consumer costs for EVs decline?

A: Expanding model options and production scale should help reduce EV costs over time. However, near-term vehicle and battery supply limitations could keep purchase prices elevated until capacity expands post-2030.