Changing political regimes is impacting the road ahead for vehicle electrification mandates
As many of you know by now, I have an acute interest in exploring the political questions beyond their headlines, trying to identify the nuances that can be informative to the readers.
Since the end of the American electoral process — and rightfully so — the tariffs discussion has dominated the headlines. Whether it’s trade experts, political pundits or auto sector enthusiasts, all are wondering about the effects of such tariffs on pricing and availability, on if it threatens the future of Canadian auto manufacturing and, generally speaking, what it truly means for our North American trade agreement.
These legitimate and encompassing inquiries will remain and will drive discussions, but reality is the answers to the aforementioned questions might only appear after months or even years of waiting.
There are already, however, important political battles happening in the United States, related to the auto industry, where the results, and most importantly the behaviours of the involved actors, could very well inform us on what our political class should do here in Canada, or to the very least what to expect in the upcoming weeks.
A few weeks ago, I wrote an article on how the American elections could push the auto industry, both in the U.S and in Canada, in completely different — or even opposite — directions.
Well, in that article, I referred to California as one of the states which reminded us of the different paradigms that existed in the future direction of the auto industry. This was observed mostly through the direct conflict between Kamala Harris’s willingness to align some of the federal energy and transportation policies with what had been put forward in California, and the President-elect’s opposition to EV mandates and other technology bans.
Of course, California has long been a bellwether for environmental policy, especially when it comes to zero-emission vehicles (ZEVs). But the state’s aggressive push to electrify transportation has turned it into a battleground — and the fight is as much about politics as it is about technology.
Many journalists have recently pointed out that manufacturers, policymakers, and voters are navigating a landscape where goals for 100 per cent EV adoption clash with economic realities and grid infrastructure challenges1. Recent developments have intensified this dynamic.
The state’s goal to ban the sale of new gas-powered vehicles by 2035, bolstered by a waiver granted by the U.S. Environmental Protection Agency (EPA), faces potential reversal under the Trump administration. The President has expressed intentions to rescind the EPA’s approval of California’s emissions standards waiver, posing a significant threat to the state’s EV ambitions.
Meanwhile, figures like Elon Musk, now a prominent adviser to President Trump, add another layer of complexity. Musk’s historical support for California’s EV policies contrasts with the federal direction, creating potentially a confusing mix between the evident self-interests, inevitable social media rambles and his unique role in the administration. California Governor Gavin Newsom is preparing for a fight, convening a special legislative session to bolster legal defenses against anticipated federal challenges.
For Canada, this debate isn’t just interesting; it’s instructive. California often sets trends that ripple northward, even shaping what provinces like Quebec and British Columbia aspire to.
More than that, it also gives a unique perspective on the interactions that emerge when one jurisdiction is hell-bent on an approach that doesn’t align as well as the new federal direction. Considering the upcoming Canadian elections and the common comprehension of the Conservatives’ stance on federal EV mandates, it will be fascinating to see how the EV-heavy provinces react.
Yet, even in Canada’s most keen regions, there’s evidence of caution. Quebec and B.C. may have been the most aggressive provinces in their transition to a full EV market, but their willingness to spend big on the necessary infrastructure and subsidies has wavered over the last few months.
While these provincial governments have framed some of these program modifications — such as the temporary suspension of the purchase incentives in Québec — as being a victim of their own successes, it seems apparent that policy doubts, market realities and financial capacities are finally catching up to them.
The electrification process of transportation is far from a straight line, as auto dealers very well know, and that’s exactly why it’s important to learn as much as we can from what is going on with our neighbours.
This isn’t just a matter of budgets; it’s about shifting political priorities. The discussion around EVs is no longer neatly divided along ideological lines. Sure, the Trump-versus-California narrative gets and will continue to get headlines, but even progressive governments are moderating their ambitions as they confront the real-world challenges of scaling up.
Politics rarely stands still, and the same goes for the auto industry. As California’s ZEV policies face headwinds, Canada’s provincial and federal governments have a chance to learn in real-time. Whether it’s about adopting best practices, avoiding missteps and most importantly aligning with the U.S. federal government, the stakes are high.
The electrification process of transportation is far from a straight line, as auto dealers very well know, and that’s exactly why it’s important to learn as much as we can from what is going on with our neighbours.
REFERENCE
1 Alex Nieves and Mike Lee, Trump and California draw battle lines around electric cars, Politico, December 19th 2024.
