Drop in EV sales signals Ottawa should drop its mandate, says the MEI

Montreal, August 15, 2025 — The slowing adoption of electric vehicles is a clear signal that the federal government should abandon its gradual ban on gas-powered vehicles, says the MEI.

“Consumer choices belong to consumers, not the government,” says Gabriel Giguère, senior policy analyst at the MEI. “With consumers’ appetite for electric vehicles waning, not only is the federal government’s mandate unrealistic, but it is also coercive.”

Data released this morning show that electric vehicle purchases are down 36.8 per cent year over year (Q2 to Q2).

In June, only 7.9 per cent of vehicle sales in Canada were zero emission, down from 13.0 per cent in June of 2024, according to Statistics Canada.

In 2023, the federal government introduced targets for gradually eliminating the sale of new gas-powered vehicles by 2035.

To meet the government’s targets, 20 per cent of new vehicle sales would need to be electric or plug-in hybrid in 2026, representing a 12-point jump from current levels and a reversal of the current trend.

“At this rate, the target will simply not be met, since Canadians’ current purchasing habits reveal a preference for other types of vehicles,” notes Mr. Giguère.

Seven in 10 Canadians (68 per cent) consider the prohibition of gas-powered vehicle sales by 2035 to be “unrealistic,” according to a Leger poll conducted earlier this month.

Asked whether they believe the EV mandate should be maintained or scrapped, 71 per cent of Canadians say it should be rescinded due to “high costs and implementation concerns.”

These concerns align with findings from an MEI Viewpoint published in February, which highlighted significant worries over the availability of charging infrastructure, the pressure on provincial electrical grids, and the high cost of purchasing new electric vehicles. Together, these concerns justify the abandonment of the federal prohibition.

“Canadians should have the freedom to purchase the vehicles that suit their needs,” says Mr. Giguère. “The adoption of new technology should be driven by innovation, not by government decree.”

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The MEI is an independent public policy think tank with offices in Montreal, Ottawa, and Calgary. Through its publications, media appearances, and advisory services to policymakers, the MEI stimulates public policy debate and reforms based on sound economics and entrepreneurship.

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