Despite what you may have heard, the electric vehicle has not fallen out of favour.
On the contrary, global EV sales are up 23 per cent year to date so far in 2025, and it’s not just China, where sales are up 22 per cent, or Europe, up 32 per cent — it’s also the less-talked-about rest of the world, which has collectively seen a 48 per cent increase in EV sales.
Indeed, it is North America that is the EV outlier with its paltry 4 per cent sales increase in 2025. And believe it or not, despite everything Trump has done to stack the deck against EVs down south — including weakening tailpipe emission standards last week, worsening fuel economy for gas cars too — the figure has been even worse here in Canada, where sales have declined to approximately 2022 levels.
Case in point: one can hardly imagine reading “Canada” in this recent Bloomberg headline: “Europe Car Sales Keep Climbing as Automakers Tout Budget EVs.” If that sounds like another reality than the one you’ve been experiencing, it’s because falling EV sales is an almost uniquely Canadian problem, and it’s also a 2025 problem.
After warming to the myriad benefits of EVs over the past decade, it isn’t the case that Canadians have suddenly decided they’re no longer stylish in 2025. Rather, this has been a recent policy choice. Which is to say the federal government made a number of decisions that have collectively broken Canada’s EV market over this past year, and while that likely wasn’t the intention, it has certainly been the end result.
The first piece fell last fall, when Canada erected a 100 per cent tariff on Chinese EVs to appease the U.S. While Europe, Mexico and Brazil all have similar tariffs, they are significantly lower (the U.K. and Australia have no special tariffs on Chinese EVs). Canada and America opted to wall their competition out entirely.
Then, a few months later, the federal EV rebate ran out of money. But it wasn’t just the fact that there was no longer a $5,000 incentive that left would-be buyers on the sidelines —it was also a lack of clarity. The federal government for months said it would bring back a rebate, then did not do so in the recent budget.
Even still, it’s not entirely clear if some new incentive program may yet return. The vast majority of interested EV buyers understandably said in a September poll that they would rather wait to make a purchase than potentially lose out on a rebate.
For almost the entirety of 2025, the next wave of Canadian EV buyers has been left waiting in incentive purgatory.
And still, yet another blow for EV consumers came about this September, when the federal government paused its Electric Vehicle Availability Standard (or EV mandate). The market signal for automakers and consumers alike has been a resounding question mark ever since.
The EV Availability Standard requires automakers to make more EVs available to consumers, meaning they must offer affordable models to grow their market share. But rather than building those economy EVs, U.S. automakers have lobbied to both kill Canada’s mandate and to keep out any Chinese or even European competition that might bring in the lower-priced models they’ve largely ignored.
A September Clean Energy Canada study found that Europe has 21 EV models selling for less than the equivalent of $40,000 Canadian (only seven of which are Chinese, by the way), while Canada has only a single EV in that price range.
Yes, Tesla boycotts didn’t help, but if this was just a Tesla popularity problem, year-on-year EV sales wouldn’t be up dramatically in Germany (53 per cent), France (40 per cent), and the U.K. (24 per cent).
The difference is those markets have everything Canada does not: lower tariffs on Chinese EVs, active regulations to make cars cleaner, existing or soon-to-be renewed consumer incentives and access to more European models currently unavailable to Canadians (this, too, Canada could and should change).
The federal government is presently weighing a number of key EV decisions — from regulations, to tariffs, to incentives — the combined outcome of which could be announced in the weeks to come. For now, we can only hope Industry Minister Melanie Joly meant it when she said her “government will be hawkish on competition” to restore affordability for Canadians.
That starts by acknowledging that Canada broke its EV market and it did so alone.
Fixing it requires an end to the radio silence and a package of policies to improve access to more affordable EVs, aligned with Canada’s long-term economic aspirations in critical minerals, innovation, and a more diversified auto sector.
This post was co-authored by Joanna Kyriazis and first appeared in the Toronto Star.
