The Canadian federal government is bringing back incentives on new EV purchases. The announcement of their return as part of a new national automotive strategy will be made tomorrow, February 5th, as reported by the CBC today.

　　In fact, the current iZEV program was never entirely mothballed, although Canadian consumers could be forgiven for thinking it had been, given the uncertainty surrounding funding for the program. It was supposed to expire on March 31st, 2025, but Ottawa provided some financing for the program in its last two budgets to avoid a funding cliff and leave dealers stranded with difficult-to-sell inventory.

　　Now, however, the announcement expected tomorrow will formalize continued funding for the program and delineate clearly eligibility requirement going forward.

　　EV targets will be revised

　　Its also being reported that the national energy strategy will include eliminating, or at least revising, EV sales targets for automakers. Currently, those require auto brands to sell 60 percent EVs by 2030, and 100 percent by 2035. The government has been facing strong pressure from auto industry pressure groups as well as from opposition parties in Ottawa to loosen if not jettison those requirements.

　　Instead of a hard EV mandate, the CBC, citing industry sources, reports that the federal government is expected to implement a system whereby automakers can earn credits for producing EVs. Its not clear exactly what those credits would or could be used for, but the goal would be to improve fuel efficiency in new vehicles being sold and reduce fuel emissions nationwide in Canada.

　　Theres a fourth notable element to Ottawas strategy set to be unveiled tomorrow. New funding will be announced to expand EV charging infrastructure across Canada, addressing what continues to be a major concern cited by car buyers hesitating to go electric.

　　All of this comes in a complex and challenging environment for Canada and for the auto industry. U.S. tariffs and Canadian retaliatory tariffs continue to influence decision-making at car company HQs, as have U.S. government policies that are explicitly hostile to electrification. Meanwhile, China has tentatively gained a minor foothold in the Canadian EV market, this while it continues to make strong gains in Europe at the expense of legacy carmakers.