Chris Severson-Baker is executive director at the Pembina Institute, where Adam Thorn is director of transportation.
Who put Canada's EV opportunity at risk? Was it Donald Trump's tariffs? Partly. But the bigger issue may be our own half-measured approach. Canada has poured billions into electric vehicle, or EV, and battery manufacturing. But while we've gone all in on building the supply, we've done almost nothing to secure the demand. The risk is painfully evident: we could end up with world-class factories and no domestic customers to buy what they make. That's not a fully thought-out strategy.
The recent announcements that Ontario will lose production of the Chevrolet BrightDrop electric parcel van and Stellantis's Jeep Compass EV (moving to Illinois) are a case in point. While Canada has committed billions in public funding to U.S. companies to build EVs, support for Canadian businesses and consumers to buy them or install charging infrastructure remains limited. Truck and van incentives exist but uptake has been slow, and passenger vehicle incentives have been paused. A complete strategy must invest in both production and adoption. After all, the best subsidy is a paying customer.
This has never been a hands-off market; major industries have long benefited from government support. Investing in both EV supply and adoption future-proofs Canada's ability to compete globally, build independent supply chains and reduce our reliance on U.S. decisions. Canada must diversify our trade and secure a stronger presence in the global market, and to do this we need to move where the momentum is - not wait and fall behind. California and China have shown that increasing domestic demand is a catalyst for developing globally competitive supply chains and manufacturers like Tesla Inc. and BYD. Whether we like it or not, the global auto market is moving toward electric, and sooner or later we will have to meet that demand.
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This is not hypothetical. One in four passenger cars sold globally this year will be electric. In China it's already more than half. Europe is approaching 20 per cent. Electric vans and trucks are growing, too, capturing nearly a fifth of the commercial fleet market in China and projected to reach almost half by 2030. While we hesitate, the world is not waiting.
With smart demand-side policies like business incentives, accessible charging networks and regulatory clarity, we could unlock jobs, supply chains and tech leadership.
Instead, we've stopped at building the production lines and failed to build the customer base. You can have the most advanced EV plant in North America but if Canadian's aren't buying, the line goes idle, jobs are lost and taxpayers pick up the bill. It's like building a home and never connecting it to water or heating systems - technically complete, but unlivable.
Critics, including many in the auto industry now pausing or shutting Canadian factories, will argue that automotive manufacturing in Canada will always focus on exports to the United States. That is part of the challenge, but that is something Canada cannot control.
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What Canada can control is whether we build a strong domestic market that supports the development of a world-class EV supply chain. One that builds affordable vehicles and components that can meet market demand in Canada, the U.S. or globally. If Canada wants a competitive EV manufacturing sector, and it would be economically wise to do so, domestic demand is an essential piece of the puzzle. Developing the knowledge and skills to be world-class leaders at home is key to building the capacity to compete globally.
Canada has the tools to succeed as a global exporter of EVs and batteries: a skilled work force, clean and abundant electricity and access to critical minerals. Critical minerals have been trumpeted by both federal and provincial governments as a new economic opportunity but global demand for critical minerals ultimately follows demand for batteries. A smart industrial strategy includes stimulating domestic adoption to support the development of a supply chain that can compete globally.
When our governments threaten to sue automakers, they may be focused on the wrong risk. The more immediate question might be, what is Canada doing to ensure that EVs built here actually get bought here? Because without a domestic market, we're still depending on someone else's policy to make our strategy work.
The opportunity isn't gone, but it won't wait. If Canada can pair industrial investment with real demand-side policy, we can secure long-term jobs, lead in the next era of automotive innovation and export to the world. If we continue with only half a strategy, we'll watch others define the market while we pay for factories that never run at full capacity.