Canada is going all in on EVs.
With much of the world transitioning from fossil fuel-powered vehicles to electric ones, Mark Carney, the Canadian prime minister, has announced policies to make Canada a top manufacturer and exporter of EVs.
The auto manufacturing sector has long been vital to the country's economy. The transition to EVs therefore marks a bold bet on the future of the market.
"Canada is an auto nation; the auto industry is central to our story," Carney said, according to The New York Times. "The auto industry is the core pillar of the Canadian economy."
Carney's plan includes billions of dollars in tax credits and other incentives to encouraging Canadian automakers to make the transition from internal combustion engines to battery-powered EVs, the Times reported.
The shift comes as the United States has engaged in protectionist policies to curb the flow of foreign-made vehicles into the country. These policies include a 25% tariff on Canadian automobiles entering the U.S., per the Times.
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At the same time, the Trump administration has removed incentives to grow the U.S.' own EV market. For example, federal tax credits for EV purchases were terminated years earlier than planned.
"I see this as Carney showing the leadership that the U.S. should be showing the world right now," John Helveston of George Washington University said, according to the Times. "I see this as Canada deciding someone needs to be an adult and start putting forth policies to embrace the future."
Globally, more and more EVs have continued to be sold each year, especially in Europe and Asia. In 2025, 20.7 million EVs were sold around the world, a 20% increase from the year prior, Elektrek reported.
In addition to producing less air pollution, which benefits public health, EVs also are cheaper to power per mile than gas-powered cars, according to Recharged. These savings are particularly pronounced for EV drivers who charge their vehicles at home rather than at public charging stations.
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$200 or more 💰 These savings can really add up. The Department of Energy has found that EV drivers can save thousands of dollars every year on fuel costs.
As many other countries continue efforts to transition to EVs, the U.S. risks falling behind, which, in turn, could benefit some of its biggest economic rivals.
"The existential risk to the U.S. auto industry isn't Chinese EVs alone," said Elizabeth Krear, CEO of the Center for Automotive Research, according to CNBC. "It's the combination of sustained government support, vertically integrated supply chains, and speed.
"Those advantages lower costs and accelerate execution. Concurrently, saturation in China's domestic market is driving automakers to expand aggressively into global markets."
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