Canada’s Auto Industry in 2026
Canada’s automotive industry supports over 500,000 workers, contributes over $16 billion annually to Canada’s GDP, and is one of the country’s largest export industries. That last point is the one that matters most right now. Vehicles are the second largest Canadian export by value at $46.5 billion in 2024, of which 92% was exported to the US. That concentration in a single export market has always been a structural risk. In 2025, that risk stopped being theoretical. Since April 2025, Canadian-made vehicles have faced a 25% US tariff on non-US content — the value of US content in CUSMA-compliant autos is exempt. The industry did not collapse. But it bent. Canadian value-added motor vehicle and parts production is down 3% year-to-date through late 2025, though it has improved in recent months with a first year-over-year increase of 2% in September since the end of 2023. The data from late 2025 into early 2026 tells a story of an industry absorbing a major shock more resilently than many forecasters had projected — but one where the downstream effects on employment, investment, and consumer demand are still playing out.
The bigger structural question in 2026 is not just tariffs. It is the collision between tariff pressure, an EV transition that has run into serious headwinds, and a consumer base dealing with elevated monthly car payments and rising gas prices. In 2025, new vehicle sales reached approximately 1.9 million units — the highest total since 2019 and the sixth-best year on record. That sounds strong. But much of it was front-loaded: consumers pulling purchases forward ahead of anticipated tariff-driven price increases. TD Economics projects a 4.3% decline in sales in 2026, bringing the market to roughly 1.82 million units. On the EV front, three major battery investment projects have either stalled or been restructured since the start of 2026. Stellantis sold its stake in the CAD $5 billion NextStar Energy battery plant in Windsor in February 2026. The Quebec government terminated a deal with Sweden’s Northvolt in September 2025, halting work on a planned CAD $7 billion EV battery plant near Montreal following the company’s bankruptcy. Honda indefinitely suspended its Canadian EV and battery investment project in Alliston, Ontario. These are not minor setbacks. They represent billions in pledged industrial investment walking out the door at exactly the moment Canada said it was going to build a new EV manufacturing identity.
Key Interesting Facts: Canadian Automotive Industry 2026
CANADA AUTO INDUSTRY — AT A GLANCE (2026)
==========================================
GDP Contribution ████████████░░░░░░░░░░░░░░░░░░░░ CAD $16B+ annually
Vehicles Exported Value ████████████████████████░░░░░░░░ CAD $46.5B (2024)
→ Share to US ████████████████████████████████ 92% of all exports
Manufacturing Sales ████████████████████████████████ CAD $55.1B (2024)
→ Share of total mfg ██████░░░░░░░░░░░░░░░░░░░░░░░░░░ 6% of total CAD sales
VEHICLE SALES — TREND:
2017 ████████████████████████████████ 2.04M (all-time peak)
2022 ██████████████████░░░░░░░░░░░░░░ 1.55M (post-pandemic low)
2024 ██████████████████████████░░░░░░ 1.83M (+8.8%)
2025 ████████████████████████████░░░░ 1.90M (+3.8%) ← 6-year high
2026f ███████████████████████████░░░░░ ~1.82M (-4.3% forecast, TD Economics)
VEHICLE EXPORTS — CROSS-BORDER COMPLEXITY:
Auto parts cross Canada-US-Mexico borders up to 8 times before final assembly
Canada supplies ~8–9% of annual US vehicle consumption
North American bloc: 16.1M vehicles produced in 2024 (17.4% of global production)
| Fact | Figure | Source / Date |
|---|---|---|
| Auto sector GDP contribution | Over CAD $16 billion annually | Government of Canada, February 18, 2026 |
| Manufacturing sales — motor vehicles and parts (2024) | CAD $55.1 billion — 6% of total Canadian manufacturing sales (CAD $847.2B) | CVMA Facts, October 2025 |
| Vehicles — share of all Canadian exports (value) | 2nd largest Canadian export; CAD $46.5B in 2024 | CVMA; Observatory of Economic Complexity 2024 |
| Share of Canadian-made vehicles exported to the US | Over 90% of production; 92% of 2024 export value | Government of Canada; CVMA |
| Share of Canadian-made auto parts exported to the US | 60% | Government of Canada, February 2026 |
| Vehicles produced in Canada (2025) | Over 1.2 million passenger vehicles | Government of Canada, February 2026 |
| Annual vehicle assemblies (rolling estimate) | ~1.4 million | Focus2Move, May 2026 |
| Parts suppliers integrated into North American supply chains | ~700 suppliers | Focus2Move, May 2026 |
| Canada’s share of annual US vehicle consumption (domestic supply) | 8–9% | TD Economics |
| Auto parts crossing borders before final assembly | Up to 7–8 times across Canada, US, and Mexico | CVMA; TD Economics |
| North American vehicle production (2024) | 16,107,477 vehicles — 17.4% of global production | CVMA |
| Canadian auto exports to the US (Cars) — 2024 | USD $28.4 billion | Observatory of Economic Complexity |
| Canadian auto exports 2024 — full sector | CAD $82.21 billion (all automotive; Canada net importer overall) | Fleet Insights / EMKAY, April 2025 |
| Canada’s automotive trade balance with US — light vehicles (2024) | CAD $8.33 billion surplus (Canada exported CAD $43.82B in light vehicles; imported CAD $35.49B) | Fleet Insights / EMKAY |
| Auto sector as Ontario’s top export | 14.8% of all Ontario exports (2024) | CVMA |
| Detroit-Windsor crossing | Highest number of loaded truck container crossings annually in North America | CVMA |
| New vehicle sales — 2024 full year | 1.83 million units (+8.8% vs. 2023) | Focus2Move; MarkLines |
| New vehicle sales — 2025 full year | ~1.90 million units (+3.8%) — 6-year high, 6th best year on record | TD Economics; DesRosiers; Dealer Ignition |
| 2026 new vehicle sales forecast | ~1.82 million units (−4.3%) | TD Economics, February 2026 |
| Q1 2026 vehicle sales | 406,000 units — down 4.4% vs. Q1 2025 | DesRosiers Automotive Consultants, April 2026 |
| March 2026 vehicle sales | 170,000 units — down 8.2% vs. March 2025 | DesRosiers, April 2, 2026 |
| May 2026 vehicle sales | ~184,000 units — down 1.7% vs. May 2025 | DesRosiers, June 3, 2026 |
| Average monthly car payment in Canada (2026) | ~CAD $1,000 | Dealer Ignition; TD Economics; CarCostCanada |
| Average used vehicle price — March 2026 | CAD $36,713 — lowest March level since 2022 | AutoTrader.ca, March 2026 |
| Tariff-related demand added to average used vehicle price (2025) | ~CAD $830 | AutoTrader.ca, March 2026 |
| Canadian government EV Affordability Program (EVAP) — launched | February 2026 — $5,000 for BEVs; $2,500 for PHEVs (vehicles under $50,000) | DesRosiers; Government of Canada |
| Consumer interest in EVs (2026 survey) | 30% of Canadians interested in EVs in 2026; search interest up 40% | Rates.ca survey, Dealer Ignition, April 2026 |
| Hybrids vs ZEVs — Ontario 2025 | Hybrids outsold ZEVs by more than 2-to-1 in Ontario | Dealer Ignition, April 2026 |
Source: Canadian Vehicle Manufacturers’ Association (CVMA) Facts (October 2025); Government of Canada Automotive Strategy (February 18, 2026); DesRosiers Automotive Consultants (monthly data, April–June 2026); TD Economics (February 2026); Focus2Move (May 2026); Fleet Insights/EMKAY (April 2025); AutoTrader.ca Price Index (March 2026); Observatory of Economic Complexity (2024); Dealer Ignition (April 2026)
The numbers in this table need to be read alongside their context. The CAD $8.33 billion surplus in light vehicles with the US in 2024 is the figure that makes the tariff situation awkward to explain to American policymakers: Canada was actually a net exporter of light vehicles to the US, not a one-sided importer draining American manufacturing. The US was a net exporter to Canada in auto parts and medium/heavy trucks, meaning the bilateral relationship was genuinely integrated rather than one-sided. The US is a net exporter to Canada of manufacturing goods, particularly motor vehicles and parts. The auto sector is the poster child for integrated trade between the two countries as well as Mexico. North American auto parts cross all three borders up to 7 to 8 times prior to final assembly of a vehicle. When each tariff increases the cost of a component that crosses the border multiple times, the math compounds quickly.
The 1.9 million units sold in 2025 being a six-year high is accurate but requires the front-loading caveat. Breaking it down to the monthly frequency, the magnitude of volatility caused by trade policies is evident. Front-loading ahead of tariffs lasted through July, averaging roughly 2 million units in seasonally adjusted annualized rate terms. In the latter half of the year, this rate fell to roughly 1.9 million as demand cooled. The consumer market in Canada bought ahead of anticipated price increases, pulled future demand into 2025, and left 2026 with a hangover. March’s 8.2% year-over-year decline — the steepest single-month drop of 2026 — was attributed by DesRosiers directly to a combination of tariff pressure and gas prices that had climbed to CAD $1.70 per litre from CAD $1.28 at the start of the year, following Middle East oil price volatility.
US Tariff Impact on Canadian Automotive Industry in 2026
US TARIFF STRUCTURE ON CANADIAN AUTOS — EFFECTIVE APRIL 2025
=============================================================
CUSMA-COMPLIANT VEHICLES:
US content portion ░░░░░░░░░░░░ EXEMPT from 25% tariff
Non-US content portion ████████████ 25% tariff applies
NON-CUSMA-COMPLIANT VEHICLES:
All content ████████████████████████████████ 25% tariff on full value
IMPACT ON CANADIAN MOTOR VEHICLE EXPORTS (April 2025 data, Bank of Canada):
Motor vehicle exports dropped ███████████████████████████ ~25% in April 2025
vs. first-quarter 2025 surge ████████████████████████████████ +10% in Q1 2025
PROJECTED ECONOMIC IMPACT (Oxford Economics):
2025: Motor vehicle and parts output: ████████░░░░░░░░░ -3.3% (CAD $550M loss)
Auto sector layoffs 2025: ██░░░░░░░░░░░░░░░ 2,200+ job losses
2029: (if tariffs permanent):
Exports below baseline: █████░░░░░░░░░░░░ -10%
Sector output: █████░░░░░░░░░░░░ -5.4% (CAD $1B)
Auto employment: ████░░░░░░░░░░░░░ -6,000 jobs
| Tariff / Trade Impact Metric | Figure | Source / Date |
|---|---|---|
| US tariff on Canadian-made vehicles (non-US content) | 25% — effective April 2025; US content in CUSMA-compliant vehicles exempt | Government of Canada; Canada.ca February 2026 |
| Canadian motor vehicle exports drop — April 2025 | Nearly 25% decline in April, following Q1 2025 surge | Bank of Canada, June 2025 |
| Q1 2025 Canadian goods exports — pre-tariff surge | Rose 10% from Q4 2024; motor vehicles and machinery led | Bank of Canada |
| Canadian GDP growth — Q1 2025 | 2.2% — boosted by front-loading before tariffs took effect | Bank of Canada |
| Canadian goods exports to US — drop in April 2025 | More than 15% drop in April vs. Q1 | Bank of Canada |
| Steel exports to US — April 2025 | Down 11% in April | Bank of Canada |
| Aluminum exports to US — April 2025 | Down 25% in April | Bank of Canada |
| Motor vehicle and parts output (full year 2025, YTD) | Down 3% year-to-date through September | RBC Economics, April 2026 |
| Motor vehicle manufacturer real value-added (Dec 2024 to Dec 2025) | +3.0% | Statistics Canada; Global Affairs Canada, May 4, 2026 |
| Motor vehicle parts manufacturer real value-added (same period) | −3.5% | Statistics Canada; Global Affairs Canada, May 4, 2026 |
| Oxford Economics — 2025 output loss from 25% auto tariff | CAD $550 million (3.3% of motor vehicle and parts production) | Oxford Economics, May 9, 2025 |
| Oxford Economics — 2025 auto sector layoffs | More than 2,200 jobs in the industry that year | Oxford Economics, May 9, 2025 |
| Oxford Economics — if tariffs permanent, by 2029 | Exports: −10% below baseline; output: −CAD $1 billion (−5.4%); employment: −6,000 jobs | Oxford Economics |
| US Budget Lab — auto tariff impact on new car prices | Average new vehicle price rises 13.5% (equivalent to USD $6,400 added to average 2024 car) | Yale Budget Lab |
| US Budget Lab — US household consumer loss from auto tariffs | USD $500–$600 average per household annually | Yale Budget Lab |
| Canadian 25% retaliatory tariff on US-made vehicles | Canada also imposed 25% tariff on vehicles from the US — applies to non-CUSMA-compliant content | Dealer Ignition; TD Economics |
| Tariff-related demand added to average Canadian used vehicle price (2025) | ~CAD $830 to the average used vehicle price | AutoTrader.ca, March 2026 |
| March 2026 SAAR (seasonally adjusted annual rate) | 1.85 million — described by DesRosiers as “undoubtedly concerning” | DesRosiers, April 2026 |
| CUSMA renegotiation timeline | Potential removal of most US tariffs on Canadian goods by late 2026 if renegotiated | Focus2Move, May 2026 |
Source: Bank of Canada (June 2025); Oxford Economics (May 9, 2025); Yale Budget Lab; RBC Economics (April 2026); Statistics Canada / Global Affairs Canada (May 4, 2026); Government of Canada (February 2026); DesRosiers Automotive Consultants (March–April 2026); AutoTrader.ca (March 2026)
The tariff picture is more complicated than most headlines suggest, and the data makes that clear. The tariff on Canadian-made vehicles applies to the 25% rate on non-US content only — the value of US content in CUSMA-compliant autos is exempt. That means the effective tariff rate on any given Canadian vehicle depends entirely on how much US-sourced content it contains. Given that parts cross the border multiple times during production, calculating the actual tariff exposure of a single vehicle is a non-trivial exercise that varies by model, by assembly plant, and by supply chain. DesRosiers noted in its March 2026 report that “the breadth of the weakness this March and the disappointing seasonally adjusted annual rate of 1.85 million are undoubtedly concerning, with both trade pressures and high gas prices weighing on the market.”
Canada’s goods exports rose 10% in the first quarter of 2025 from the fourth quarter of 2024, with exports of machinery and equipment and motor vehicles leading the surge. But getting ahead of tariffs borrowed activity from the future, and a sharp reversal followed. Canadian goods exports to the United States dropped more than 15% in April — motor vehicle exports were down almost 25%. That pattern — borrow from the future, pay for it in the present — is playing out in the 2026 new vehicle sales data too, where the front-loaded 2025 demand has left the market soft. The divergence between motor vehicle manufacturers (real value-added up 3% December to December) and parts manufacturers (real value-added down 3.5%) suggests the tariff pressure is falling unevenly on the supply chain, with parts producers bearing a disproportionate share of the adjustment cost.
Canadian Automotive Employment Statistics 2026
AUTOMOTIVE EMPLOYMENT — CANADA 2026 (DesRosiers, February 2026)
================================================================
TOTAL AUTO-RELATED EMPLOYMENT (February 2026): 578,900 workers
Year-over-year change: -0.8% (down from ~584,600 in Feb 2025)
BY SECTOR:
Automobile Dealers ████████████████████████████░░░░ 158,200 (+0.3% YoY)
Auto Repair & Maintenance ███████████████████░░░░░░░░░░░░░ 123,100 (+1.9% YoY)
Motor Vehicle Parts Mfg ████████████░░░░░░░░░░░░░░░░░░░░ ~65,000 (est.) (-8.7% YoY ← sharpest drop)
Motor Vehicle Mfg ████████████░░░░░░░░░░░░░░░░░░░░ ~50,000 (est.) (+1.4% YoY)
EMPLOYMENT BY SPECIFIC CATEGORY (IBISWorld / MadeInCA 2025):
Automobile & light-duty manufacturing: 26,259
Car & automobile manufacturing: 12,727
Engine & parts manufacturing: 6,253
Direct manufacturing jobs (total): ~130,000
Sales and services sector: ~473,500
Motor vehicle and parts mfg sales sector: ~6,100 (engine mfg)
| Employment Metric | Figure | Source / Date |
|---|---|---|
| Total automotive-related employment — February 2026 | 578,900 workers | DesRosiers Automotive Consultants, May 2026 |
| Year-over-year change — February 2026 | −0.8% vs. February 2025 | DesRosiers / Canadian Auto Dealer, May 2026 |
| Sector trend — 2023 and 2024 | Employment grew in both years | DesRosiers; Canadian Auto Dealer |
| Automobile dealers — February 2026 | 158,200 workers (+0.3% YoY) — largest single employment category | DesRosiers |
| Automotive repair and maintenance — February 2026 | 123,100 workers (+1.9% YoY) | DesRosiers |
| Motor vehicle parts and accessories manufacturing | Fell 8.7% YoY in February — loss of ~6,200 jobs — sharpest decline of any sub-sector | DesRosiers / Canadian Auto Dealer |
| Motor vehicle manufacturing — February 2026 | Increased 1.4% YoY — but still below pre-pandemic levels | DesRosiers |
| Direct automotive manufacturing jobs (2025) | ~130,000 — mostly in Ontario | Government of Canada; MadeInCA |
| Motor vehicle sales and services employment (2024) | ~473,500 people | MadeInCA |
| Automobile and light-duty vehicle manufacturing (IBISWorld 2025) | 26,259 employees (+1.3% YoY) | IBISWorld, October 2025 |
| Car and automobile manufacturing specifically (2025) | 12,727 employees (+2.3%) | IBISWorld, April 2025 |
| Engine and parts manufacturing (2025) | 6,253 employees (+2.5%) | IBISWorld, April 2025 |
| Average salary — Canadian automotive industry | CAD $89,400 | Salary Explorer / MadeInCA |
| Assembly workers — salary premium vs. national average | ~30% more than national average | MadeInCA |
| Salary range — low to high (automotive) | CAD $35,600 to CAD $222,000 | Salary Explorer / MadeInCA |
| Ontario’s share of direct auto manufacturing jobs | Majority — industry concentrated in Ontario’s Great Lakes cluster | Government of Canada; CVMA |
| Oxford Economics — 2025 layoffs from auto tariff | More than 2,200 in the motor vehicle sector that year | Oxford Economics, May 2025 |
| Oxford Economics — projected job losses by 2029 (permanent tariffs) | 6,000 jobs below baseline across the sector | Oxford Economics |
Source: DesRosiers Automotive Consultants (Canadian Auto Dealer, May 30, 2026); Government of Canada (February 2026); MadeInCA (January 2026); IBISWorld Canada employment data (October 2025 and April 2025); Oxford Economics (May 2025)
Employment across Canada’s automotive sector weakened in early 2026, according to new industry data released by DesRosiers Automotive Consultants. Total automotive-related employment reached 578,900 workers in February, down 0.8% from the same month last year. The sector had already shown signs of softening at the end of 2025, with December employment slightly below year-earlier levels.
The 8.7% drop in parts manufacturing employment is the number that should catch attention here. Motor vehicle parts and accessories manufacturing recorded the sharpest decline, with employment falling 8.7% year-over-year in February, representing a loss of 6,200 jobs. Parts manufacturing is where tariff exposure hits first — these are the suppliers whose products cross the border multiple times, who have the least pricing power relative to the OEMs they supply, and who are least able to absorb cost increases without cutting headcount. The divergence between parts manufacturing losing 6,200 jobs and auto repair gaining workers (up 1.9%) tells you something about where the adjustment is landing. Andrew King, Managing Partner at DesRosiers, noted that “employment figures saw growth in 2023 and 2024 but have begun to see some pullback as we move through 2026,” and added that “the ongoing political and international turmoil does carry clear consequences for Canadians.”
Canadian Automotive Trade Data and Export Statistics 2026
CANADA-US AUTOMOTIVE TRADE — 2024 BILATERAL SNAPSHOT
======================================================
CANADA EXPORTS TO US (automotive, 2024):
Cars (light vehicles) ████████████████████████████████ USD $28.4B
Auto parts (US imports from Canada) ████████████████░░░░░░░░ USD $11.0B (2025)
US EXPORTS TO CANADA (automotive, 2024):
Cars █████████████████░░░░░░░░░░░░░░ USD $15.6B
Delivery Trucks ██████████████████░░░░░░░░░░░░░ USD $14.7B
Auto parts ████████████████░░░░░░░░░░░░░░░ USD $12.8B
CANADA'S LIGHT VEHICLE TRADE BALANCE WITH US (2024):
Canada exports (light vehicles) ████████████████████████████████ CAD $43.82B
US to Canada (light vehicles) █████████████████████████░░░░░░░ CAD $35.49B
Canada surplus (light vehicles): ███░░░░░░░░░░░░░░░░░░░░░░░░░░░░░ CAD +$8.33B
CANADA AUTO IMPORTS — DOMESTIC MARKET:
US share of Canadian automotive imports: ██████████████████████████████ 57%
Imports as share of new vehicles sold: ████████████████████████████░░ ~75% of units
| Trade Metric | Figure | Source / Date |
|---|---|---|
| Canadian vehicle exports — total 2024 (all automotive) | CAD $82.21 billion exports; CAD $142.74B imports (Canada net importer overall) | Fleet Insights / EMKAY, April 2025 |
| Canadian vehicles exported to US — as share | 95% of all Canadian automotive exports go to US | Fleet Insights / EMKAY |
| Cars (Canada to US) — 2024 | USD $28.4 billion — 2nd largest bilateral product exported after crude petroleum | Observatory of Economic Complexity |
| Crude petroleum — Canada’s top US export | USD $101 billion (for context; autos are 2nd) | Observatory of Economic Complexity |
| US auto parts imports from Canada — 2025 | USD $11.01 billion | UN COMTRADE / TradingEconomics |
| Canada’s light vehicle surplus with US (2024) | CAD $8.33 billion surplus (exported CAD $43.82B, imported CAD $35.49B) | Fleet Insights / EMKAY |
| US overall trade deficit with Canada — 2024 | ~USD $45 billion — 2nd smallest of any major trading partner; just 4% of overall US deficit | TD Economics |
| US-Canada auto trade balance | Broadly balanced; US net exporter in parts and medium/heavy trucks | TD Economics; CVMA |
| US share of Canadian automotive import market | ~57% as of 2024 | Trade.gov Canada Automotive guide |
| Canadian auto imports — passenger vehicles (2023) | USD $38.6 billion (+15.6% vs. 2022) | Trade.gov |
| Canadian auto imports — parts and components (2023) | USD $18.5 billion (+19.7% vs. 2022) | Trade.gov |
| US-made vehicles as share of new Canadian sales (approx.) | ~40% of new vehicles sold in Canada are US-made | Trade.gov Canada |
| Imports as share of total new vehicles market | ~75% of all new vehicles sold in Canada are imported | Trade.gov Canada |
| Ontario’s auto exports as share of provincial total | 14.8% of all Ontario exports | CVMA, 2024 |
| Global Affairs Canada — motor vehicles export decline (2024) | Motor vehicles and parts sector experienced a CAD $6.4 billion decline (−7.9%) in 2024 | Global Affairs Canada, 2024 trade highlights |
| Reason for 2024 export decline | Retooling for EV transition in Ontario + US factory closures for EVs affecting Canadian-content demand | Global Affairs Canada, 2024 |
Source: Observatory of Economic Complexity (2024); Fleet Insights/EMKAY (April 2025); TD Economics; Trade.gov Canada Automotive Commercial Guide (April 2026); Global Affairs Canada annual trade highlights (2024); UN COMTRADE / TradingEconomics; CVMA
The trade relationship between Canada and the United States in automotive products is genuinely interdependent. The USD $45 billion overall US trade deficit with Canada sounds large until you put it in context: that amounts to a mere 4% of the overall US trade deficit, placing it as the second smallest among major partners, behind only France. The US is a net exporter to Canada of manufacturing goods, particularly motor vehicles and parts. Targeting Canada with tariffs to address the US trade deficit is a bit like worrying about the rounding error. The Canadian auto sector’s exposure runs in both directions: Canada runs a surplus in light vehicles with the US but a deficit in parts and heavy trucks, and the net bilateral automotive balance is roughly zero.
The CAD $6.4 billion decline in motor vehicle and parts exports in 2024 — a 7.9% drop that predates the April 2025 tariffs — was driven by two things: OEM retooling for EV production in Ontario, and US factory closures in response to softening EV demand that reduced the need for Canadian-content inputs. That context matters for reading 2025 and 2026 data. Some of the weakness in Canadian automotive production was already in the system before tariffs arrived. The tariffs added incremental pressure on top of a sector already navigating a difficult retooling cycle.
EV Investment and Canada’s Automotive Future in 2026
MAJOR EV INVESTMENT COMMITMENTS IN CANADA — STATUS (June 2026)
===============================================================
NextStar Energy (Windsor, ON):
Investment committed: ████████████████████████████████ CAD $5B+ total
Govt subsidies pledged: ████████████████████████████████ CAD $15B production subsidies + CAD $500M SIF
Status: Stellantis SOLD its 49% stake to LG Energy Solution — Feb 2026
LG retains full ownership; still operational but restructured
Northvolt (Quebec):
Planned investment: ████████████████████░░░░░░░░░░░░ CAD $7B (planned)
Status: CANCELLED — Quebec terminated deal Sept 2025 after Northvolt bankruptcy
Honda (Alliston, ON):
Status: INDEFINITELY SUSPENDED — "evolving business conditions, shifting customer demand"
OPERATIONAL EV PLANTS:
GM CAMI (Ingersoll, ON): ✓ Operational — BrightDrop electric vans; opened Dec 2022
EV CONSUMER MARKET (2026):
Hybrids outsold ZEVs in Ontario: 2-to-1 margin
Federal EV incentive (EVAP): $5,000 BEV / $2,500 PHEV (launched Feb 2026)
EV Availability Standard 2026: PAUSED — 60-day review announced
Consumer EV interest (2026 survey): 30% of Canadians — search interest +40%
| EV Metric | Figure / Status | Source / Date |
|---|---|---|
| NextStar Energy (Windsor, ON) — total investment | More than CAD $5 billion invested to date | Stellantis / LG Energy Solution press release, February 6, 2026 |
| NextStar — federal production subsidies pledged | Up to CAD $15 billion via Special Contribution Agreement (2023) | CBC News, October 29, 2025 |
| NextStar — Strategic Innovation Fund grant | Up to CAD $500 million | CBC News, October 29, 2025 |
| NextStar ownership change | Stellantis sold its 49% equity stake to LG Energy Solution — February 6, 2026 | SEC filing; WardsAuto, June 2026 |
| Stellantis reason for exiting NextStar | Part of USD $26 billion write-down on EV investments globally | WardsAuto, June 2026 |
| NextStar capacity | Batteries for up to 450,000 Stellantis vehicles per year; expected to employ 2,500 people | CBC News, May 2025 |
| Northvolt Quebec battery plant | CAD $7 billion planned — Quebec terminated deal after Northvolt’s bankruptcy in September 2025 | WardsAuto, June 2026; CBC |
| Honda — Alliston, Ontario EV project | Indefinitely suspended — cited “evolving business conditions, change in external resource strategy, shifting customer demand” | WardsAuto, June 2026 |
| GM CAMI plant — Ingersoll, Ontario | Operational — Canada’s first large-scale EV assembly plant; opened December 2022 | CBC News |
| Total Canadian government EV commitments (recent years) | Billions pledged across 2021, 2022, 2023, 2024 budgets | Trade.gov Canada |
| OECD assessment (March 2026) | Canada’s EV/battery export ambitions face “steeper headwinds” than alternatives; Canada’s EV share of global exports lower than its overall export share | OECD, cited WardsAuto June 2026 |
| EV Availability Standard 2026 status | Paused — federal government launched 60-day review to align targets with market realities under tariff pressure | CarCostCanada, March 2026 |
| EVAP — Electric Vehicle Affordability Program | Launched February 2026: CAD $5,000 for BEVs; CAD $2,500 for PHEVs (vehicles under CAD $50,000) | DesRosiers / Government of Canada |
| Ontario ZEV sales — March 2026 | ~1,000 zero-emission vehicles sold in March | DesRosiers, April 2026 |
| Hybrids vs ZEV sales — Ontario 2025 | Hybrids outsold ZEVs by more than 2-to-1 | Dealer Ignition, April 2026 |
| Canadian EV consumer interest — 2026 survey | 30% of Canadians interested in EVs; search interest up 40% | Rates.ca survey, Dealer Ignition |
| Used EV market — 2026 | Under pressure: reduced consumer demand, rising days in stock, greater dealer discounting | AutoTrader.ca, March 2026 |
Source: Stellantis / LG Energy Solution press release (February 6, 2026); WardsAuto (June 2026); CBC News (October 29, 2025 and May 13, 2025); CarCostCanada (March 2026); DesRosiers (April 2026); OECD (March 2026 cited in WardsAuto); Government of Canada; Dealer Ignition (April 2026)
The EV investment story in Canada has gone from ambitious to genuinely uncertain in the space of about 18 months. The three major project setbacks — Stellantis selling its stake in the CAD $5 billion NextStar Energy plant, Quebec terminating the CAD $7 billion Northvolt deal after the company’s bankruptcy, and Honda indefinitely suspending its Canadian EV investment project — do not mean the Canadian EV industry is finished. The NextStar plant is still operational under full LG Energy Solution ownership, and GM CAMI in Ingersoll continues assembling electric vehicles. But they do mean the bold “Canada as a global EV hub” narrative from 2022 and 2023 has collided hard with reality.
An OECD analysis released in March 2026 concluded that Canada’s ambition to scale up battery production and broader EV manufacturing faces steeper headwinds than alternatives like biogas or carbon capture. Canada’s share of global EV and battery exports, it found, is lower than its overall share of worldwide exports. That is a pointed conclusion from an organization that does not typically editorialize on industrial policy. The federal government paused its EV Availability Standard in early 2026 for a 60-day review — a signal that compliance timelines are being reassessed. The launch of the new Electric Vehicle Affordability Program in February 2026, offering CAD $5,000 for battery electric vehicles under CAD $50,000, is an attempt to sustain consumer demand while the production side gets sorted out. Whether it is enough to move the needle meaningfully when the average monthly car payment sits near CAD $1,000 and consumer confidence remains fragile is a question the sales data will answer over the next several quarters.
Canadian Vehicle Sales and Consumer Market Data in 2026
MONTHLY CANADIAN VEHICLE SALES — 2025/2026 (DesRosiers, SAAR)
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Jan 2026 SAAR: █████████████████████████████████████████ 2.00M (strong)
Feb 2026 SAAR: ████████████████████████████████████████░ ~2.00M (slightly below Jan)
Mar 2026 SAAR: ████████████████████████████████░░░░░░░░░ 1.85M ← "undoubtedly concerning"
Apr 2026 units: ███████████████████████████░░░░░░░░░░░░░░ 178,000 (tariff drag)
May 2026 units: ████████████████████████████░░░░░░░░░░░░░ 184,000 (-1.7% YoY)
FRONT-LOADING PATTERN (2025):
H1 2025 SAAR avg: ████████████████████████████████████████████ ~2.0M
H2 2025 SAAR avg: ██████████████████████████████████████░░░░░░ ~1.9M (demand cooled)
Q1 2026 total: 406,000 units (-4.4% vs Q1 2025)
2025 full year: ~1.90M units (6-year high; 6th best ever)
2026 forecast: ~1.82M units (-4.3%, TD Economics)
TOP BRANDS — ALL-TIME RECORDS IN 2025 (examples):
Toyota, Hyundai, Kia, Volkswagen: all posted all-time annual sales records in 2025
| Sales / Market Metric | Figure | Source / Date |
|---|---|---|
| 2025 full year new vehicle sales | ~1.90 million units — highest since 2019; 6th best year on record | TD Economics; DesRosiers; Retail Insider |
| 2025 vs. all-time peak | Below the 2.04 million peak of 2017 | Focus2Move |
| TD Economics 2026 full-year sales forecast | ~1.82 million units (−4.3% from 2025) | TD Economics, February 2026 |
| January 2026 SAAR | 2.00 million — “stronger than anything recorded during Q3 or Q4 2025” | DesRosiers / Canadian Auto Dealer, March 2026 |
| February 2026 sales | Just under 122,000 units (−0.2% vs. Feb 2025); SAAR 2.00M | DesRosiers, March 6, 2026 |
| March 2026 sales | 170,000 units — down 8.2% vs. March 2025 | DesRosiers, April 2, 2026 |
| March 2026 SAAR | 1.85 million — DesRosiers called it “undoubtedly concerning” | DesRosiers |
| Contributing factors to March weakness | Tariff-related economic headwinds + gas prices rising to CAD $1.70/litre (from CAD $1.28 at start of 2026) | DesRosiers; TipRanks, April 2026 |
| April 2026 sales | ~178,000 units | MarkLines / DesRosiers, May 2026 |
| May 2026 sales | ~184,000 units — down 1.7% vs. May 2025 | DesRosiers, June 3, 2026 |
| Q1 2026 total | 406,000 units — down 4.4% vs. Q1 2025 | DesRosiers, April 2026 |
| Average monthly car payment (2026) | ~CAD $1,000 | Dealer Ignition; CarCostCanada |
| Average used vehicle price — March 2026 | CAD $36,713 — down 0.3% YoY; lowest March since 2022 | AutoTrader.ca, March 2026 |
| Used vehicle wholesale values — 2026 trend | Softening steadily: −0.20% to −0.41% per week through late 2025 into early 2026 | Canadian Black Book / Dealer Ignition |
| Used vehicle Q1 2026 | Modest growth vs. same period 2025 — stronger than expected | AutoTrader.ca, March 2026 |
| New vehicle market Q1 2026 | Softened — expected, since shoppers pulled forward purchases in 2025 | AutoTrader.ca, March 2026 |
| Bank of Canada policy rate (March 2026) | 2.25% — held at March 18 meeting; growth risks tilted to downside | CarCostCanada, March 2026 |
| Consumer prime rate (2026) | ~4.45% | CarCostCanada, March 2026 |
Source: DesRosiers Automotive Consultants (monthly reports, February–June 2026); TD Economics (February 2026); AutoTrader.ca Price Index (March 2026); TipRanks (April 2026); CarCostCanada (March 2026); MarkLines (June 2026); Canadian Auto Dealer (March 2026)
The monthly sales data through May 2026 tells a market story that is softer than the 2025 full-year number implies. February sales came in at just under 122,000 units, a decline of 0.2% from February 2025, with the seasonally adjusted annual rate reaching 2.00 million — slightly below January but stronger than anything recorded during the third or fourth quarters of 2025. That was the high-water mark for 2026 so far. March at 8.2% down, April at a weak 178,000 units, and May down 1.7% paints a picture of a market that is grinding through the tariff transition without collapsing but without recovering either.
After several turbulent years, Canada’s vehicle market began 2026 on steadier footing. But steadier does not mean back to normal. In the first quarter, the used vehicle market was stronger than expected. The new vehicle market, meanwhile, softened. That was more expected, since many shoppers had moved up their purchase plans in 2025 over concerns that tariffs could raise prices. The used market benefiting from the same tariff anxiety that softened new vehicle demand is a logical pattern: if new vehicles are going to get more expensive, used vehicles become relatively more attractive. Tariff-related demand had added about CAD $830 to the average used vehicle price in 2025. That premium is now fading as the tariff front-loading impulse dissipates, which explains why used prices have softened into 2026. For consumers carrying a monthly payment near CAD $1,000 and filling up at CAD $1.70 per litre, the affordability math is not improving.
Disclaimer: The data research report we present here is based on information found from various sources. We are not liable for any financial loss, errors, or damages of any kind that may result from the use of the information herein. We acknowledge that though we try to report accurately, we cannot verify the absolute facts of everything that has been represented.
