With the Government of Canada declaring an end to iZEV incentives, the 2035 federal EV adoption target is proving to be more problematic than ever.

Around the turn of the decade, we saw multiple governments in developed nations starting to declare mandates on electric vehicle adoption, as part of an effort to meet emissions target reductions as outlined in the 2015 Paris Agreement. Among these jurisdictions, were China, Japan, Singapore, Sri Lanka, South Korea, as well as a host of countries in Europe including Belgium, Denmark, France, Italy, Portugal, Norway, The Netherlands, Slovenia, Sweden and the United Kingdom. Here in North America, the Government of Canada and 16 U.S. states (California, Colorado, Connecticut, Maine, Maryland, Massachusetts, Minnesota, New Jersey, Nevada, New Mexico, New York, Oregon, Rhode Island, Vermont, Virginia and Washington), as well as the District of Columbia, have adopted ZEV quotas with a goal of 100% EV sales.

Smog reduction

Here in North America, the state of California, particularly the California Air Resources Board (CARB) has long been aggressive in reducing vehicle emissions, initially due to the growing problem of Oxides of Nitrogen (smog) formation, particularly in areas such as the Los Angeles basin, during the 1960s. 

Yet the aggressive push toward battery electric vehicle adoption over the last decade, has brought with it controversies and a growing list of problems. Inadequate charging infrastructure, overtaxing of the electrical grid, high manufacturing and purchase cost of EVs, massive financial losses sustained by automakers, and lack of demand have meant that in most cases, that EV sales targets proposed by governments have become increasingly unrealistic. As subsidies have begun to dwindle, and costs mount, there has been significant pushback on these mandates.

On January 20^th, the inauguration of Donald J. Trump as the 47^th President of the United States, represented a change in policy direction for the U.S., one in which Biden era emissions targets are likely to be rolled back, and EV subsidies cut back or axed entirely.

Waiver withdrawal

In California, CARB has already declared that it is no longer seeking a waiver from the Environmental Protection Agency for its controversial Advanced Clean Fleets regulations for trucks, which would have required the ending of sales of new fossil fuel trucks by 2036 and full adoption of zero-emission models by 2042. While this largely refers to commercial vehicles it does demonstrate that perhaps the state no longer has faith in its own EV mandates.

Additionally, while we have seen some success with EV adoption here in Canada, notably in British Columbia and Quebec, at the federal level, the EV mandate (which called for 100% Zero Emissions Vehicle sales by 2035) has come under increasing scrutiny as over ambitious and simply unworkable.

On January 14^th, Canadian vehicle manufacturers and new car dealers formally called for an end to the federal vehicle EV sales mandate.

This followed in the wake of the Government of Canada announcing that it was ending EV incentives under the iZEV (Incentives for Zero Emissions Vehicles) program. With these rebates no longer available, and lack of cost parity and convenience with ICE vehicles for most consumers, going forward, it will become much harder for these national EV sales targets to be met, particularly in a higher interest rate, high cost of living environment that most consumers are currently having to contend with.

Lack of support

Brian Kingston, President & CEO of the Canadian Vehicle Manufacturers Association, stated in a press release, that with the Government of Canada announcing the end of iZEV incentives, “mandating Canadians to buy ZEVs without providing them the supports needed to switch to electric is a made-in-Canada policy failure.”

Tim Reuss, President of the Canadian Automobile Dealers Association (CADA) said that with the government backing away, we are now left with a “completely unrealistic plan at the federal level.” Reuss added that, “there is hypocrisy in imposing ambitious ZEV mandates and penalties on consumers when the government is showing a clear lack of motivation and support for their own policy goals.”

David Adams, President of the Global Automakers of Canada also weighed in on the government’s announcement, stating that “if the government is going to mandate manufacturers to put ZEVs into the marketplace and pay severe penalties for not doing so, then government needs to ensure that it is doing its part to address key barriers to EV uptake—including price and infrastructure.”

Adams also noted that, if the federal government (as well as the provinces of Quebec and British Columbia) aren’t willing to provide incentives, “they must consider revising or eliminating their mandates,” since “the fundamental assumptions and EV adoption rates on which those mandates were based, have changed.”

Inadequate funding

On Parliament Hill, the auto industry also pointed out a troubling lack of preparedness and foresight within the federal government, since it has failed to secure adequate funding for the transition to electrified transportation that it had actively promoted.

While EVs have their place and use cases, and we will continue to see new models introduce and sales increase, their success will ultimately rest with market demand, not government regulation.

EV mandates are already demonstrating that they are extremely costly, unworkable, and overall, are proving detrimental to the vitality of the automotive industry and by extension the larger economy. The fact that the Government of Canada is now the third ZEV mandate jurisdiction to significantly restrict or eliminate incentives to assist with the purchase of zero emission vehicles, only demonstrates just how ineffective a mandated approach to EV adoption really is.