Automakers could be on the hook for billions under EV mandate if sales don't ramp up

Automakers are warning they could be on the hook for billions of dollars in credit purchases if Canada's electric vehicle mandate is enforced as written, and sales don't ramp up.

Speaking to a Parliamentary committee on Thursday, the head of the Canadian organization representing Ford, General Motors and Stellantis said automakers already have deals lined up with companies like Tesla to buy credits to close expected sales deficits, which could cost the industry more than $3 billion by 2030.

The EV sales mandate requires automakers to have a certain percentage of new car, SUV and light-duty truck sales be zero-emission vehicles — which includes plug-in hybrids. 

If companies don't meet their sales targets, they can build charging stations for credits to cover up to 10 per cent of their sales target.

Any additional credits carmakers will need to buy from companies like Tesla who have sold more EVs than required.

The government paused the mandate for 2026 earlier this month and launched a 60-day review, but Canada's automakers have called for its full repeal.

Picture Courtesy: THE CANADIAN PRESS/Sean Kilpatrick