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Executive Summary & Introduction

  • Executive Summary
  • Introduction

I. REASONS TO KEEP THE ZEV REGS

  • A. Canada, and the World, Must Cut GHG Emissions
  • B. Ceasing to Burn Fossil Fuels for Transport is Absolutely Necessary
  • C. Burning Fossil Fuels, Including to Power Light Duty Vehicles, Is a Health Hazard
  • D. The Automakers Will Not Transition to ZEVs Unless They Are Forced to Do So
  • E. The Automakers Have Met 2024 and Earlier Sales Quotas in Canada and Other Jurisdictions
  • F. The Automakers Will Still Make Profits With a 100% ZEV Sales Quota
  • G. Canada’s 20% Sales Quota for 2026 Could Be Achieved If Not Hindered by Changes in Government Policy
  • H. Canada’s 20% Sales Quota for 2026 Could Be Achieved But for the Automakers’ Intransigence
  • I. Canadian ZEV Sales Are Depressed By Limited Selection
  • J. The ZEV Regs Already Have “Compliance Flexibility” to Help Automakers
  • K. ZEV sales mandates work, and they work in Canada

II. SUGGESTIONS FOR IMPROVING OR "FIXING" THE ZEV REGS

  • A. The 2035 sales quota requiring that 100% of light duty vehicles be ZEVs must be maintained
  • B. Maintain the 2027 and future sales quotas as they are currently set, but let the automakers earn credits for the ZEVs they sell in 2026
  • C. Provide extra credit for selling ZEVs at a price below $40,000 CDN

III. SUGGESTIONS FOR COMPLEMENTARY POLICIES TO ASSIST THE ZEV REGS

  • A. SUGGESTIONS FOR COMPLEMENTARY POLICIES TO ASSIST THE ZEV REGS
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F. The Automakers Will Still Make Profits With a 100% ZEV Sales Quota

The automakers may make less profit with a 100% ZEV sales quota than they would with no sales quotas, but they will still make profits. Jonn Axsen and Chandan Bhardwaj, two professors from the School of Resource and Environmental Management, Simon Fraser University, Burnaby, British Columbia, used the AUtomaker-consumer Model (AUM) to compare policy impacts on ZEV sales, GHG mitigation, vehicle markups and prices, and automaker profits from 2023 to 2035. They determined:

The ZEV standard scenario has the… effect [of] decreasing 2023−2035 cumulative profits by 7.5% relative to the baseline. These profit reductions are due to changes in automaker practices relative to the baseline. These include added R&D investment costs, fewer new vehicle sales (due to own-price elasticity), and lower profit margins for ZEVs (in initial years). Interestingly, automaker profits per year still increase by 15% from 2023 to 2035, mainly driven by our assumptions of increasing population that lead to an overall increase in new vehicle sales (even with own-price elasticities).1

The government must not permit the automakers to make the maximum profits that they can when they are doing so at the expense of the climate.

✉️ Make Your Submission!

1 Axsen, John and Chandan Bhardwaj, “Subsidies, Standards, or Both? Trade-Offs among Policies for 100% Zero-Emissions Vehicle Sales”, Environmental Science & Technology 2025 59 (4), 1932-1941, p. 1938. DOI: 10.1021/acs.est.4c11772. Retrieved on 20 September 2025 from: https://pubs.acs.org/doi/pdf/10.1021/acs.est.4c11772?ref=article_openPDF&trk=public_post_comment-text

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