Canada Finalizes ZEV Standard – 100% ZEV By 2035

Canada has finalized its Electric Vehicle Availability Standard for its national target of 100 percent zero-emission vehicle sales by 2035. The targets, set for light-duty vehicles in both consumer and commercial markets, create annual percentage of total sales targets for ZEVs between 2026 and 2035. Beginning with 20 percent zero-emissions sales in 2026 and growing towards 100 percent in 2035.

The regulations define ZEVs as being battery-electric, fuel-cell, and plug-in hybrid vehicles that are all capable of running on electricity alone for a specified minimum distance based on the vehicle’s size class. The regulations also include a credit scheme to add flexibility for automotive manufacturers. Earlier deployment of ZEVs will result in credits that can be saved for up to five years or traded to those who have not met targets. Companies which generate deficits by not meeting targets can remedy those within three years or trade for credits to offset. Up until 2035, when the credit scheme will end and those with a deficit would face penalties.

Credits can begin accumulating in model year 2024. Credits can also be gained or deficits offset with investments in charging infrastructure up until 2030. Every $20,000 invested in a new fast charging infrastructure project will result in a credit, provided certain criteria (such as public availability) are met.

Finally, the credit scheme does not allow credits towards deficit to exceed 10 percent of a company’s ZEV targets, meaning companies must be within 90 percent of the percentage targets or face fines.

For the purpose of meeting ZEV targets, fully battery- or fuel-cell-electric vehicles will receive automatic credits towards the model year’s ZEV targets. Plug-in hybrids, however, will receive credits based on model year and total all-electric range. These credits range from 0.15 for a 2026 model year vehicle that has an all-electric range of 35-49 km. They rise from there based on seating capacity and range in each model year. 2026 has the most flexibility for range. Starting in 2027, all-electric range must be at least 50 km with any vehicle achieving more than 79 km of range being considered the same as a battery-electric model. By 2028, the most a PHEV can achieve in credits is 0.75 unless all-electric range exceeds that 79 km goal.

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