Canada’s electric-vehicle ambitions are losing momentum as the country faces delayed investments, weaker consumer demand and growing global competition. Several major projects in Canada’s EV supply chain have been postponed or placed in doubt, threatening to slow progress toward a cleaner transportation future.

Not long ago, Canada appeared poised to become a major hub for electric-vehicle production, battery manufacturing and critical mineral development. Tens of billions of dollars in public and private commitments suggested strong momentum. Now, many of those initiatives are facing setbacks, with companies delaying construction or reconsidering large-scale production plans for battery gigafactories and vehicle plants.

Consumer interest is also waning with fewer Canadians planning to switch to electric vehicles, as high costs, limited charging infrastructure and concerns about reliability in winter conditions continue to weigh on demand.

The federal government has poured substantial funding into the sector, supporting manufacturing incentives and infrastructure. But critics say much of that money benefits global automakers, with limited long-term gains for domestic manufacturing or technology development.

Trade and tariff issues further complicate the outlook. Canada’s auto industry remains heavily tied to the U.S. market, where protectionist policies and subsidies shape competitiveness. Analysts warn that Canada’s smaller market makes large-scale EV production challenging without guaranteed export routes.

The looming 2035 deadline to phase out internal-combustion vehicle sales adds pressure. Without matching policies to market realities, the transition could leave behind stranded assets and unmet targets.

As conditions shift, Canada must decide whether to pursue an all-encompassing EV strategy or refocus on sectors where it can sustain a competitive edge. The direction chosen will shape the future of the nation’s manufacturing and its role in the global shift to electric transportation.