Globally, the market for electric vehicles (EVs) is expanding rapidly. Last year, worldwide EV sales exceeded 10 million for the first time, representing 14 percent of all new vehicles purchased, up from less than 5 percent in the late 2010s. Rising EV market penetration reflects greater efficiency in EV and related parts manufacturing, improvements in the battery and storage technologies that underpin EVs, and the impact of government policies to encourage the development of the EV industry and boost consumer demand.

This essay looks at EV purchase subsidies in Canada, which have been introduced to accelerate market uptake of these vehicles as part of governments’ efforts to reduce greenhouse gas (GHG) emissions that contribute to climate change. Transportation accounts for almost one-quarter of Canada’s total GHG emissions, so it is not surprising that Canadian policymakers are focusing on emissions from this sector.