The Biggest Automotive News Stories of 2025

The year 2025 will go down in history as one of the most significant for the Canadian automotive industry, mainly due to the major trade conflict involving the U.S. imposition of substantial tariffs on Canadian-made vehicles and parts, and Canada's subsequent retaliation.

This new trade war not only led to regulatory chaos in the industry, production shifts, and significant government intervention, but it also created an environment of uncertainty for car shoppers. Many Canadian car shoppers were already hungover from a market permanently altered by higher prices, a shift to online purchasing, and longer wait times for new vehicles, five years after the COVID-19 pandemic changed the world.

U.S. Announced Tariffs on Canadian-Made Vehicles

Let’s kick this off with the biggest and most unprecedented Canadian news event in 2025: the new international trade tariff war.

In April, U.S. President Donald Trump signed an Executive Order that imposed a 25 per cent tariff on Canadian automobiles. Subsequently, our federal government hit back with reciprocal 25 per cent tariffs on non-CUSMA (the Canada-United States-Mexico free trade Agreement) compliant U.S.-made vehicles and content from other non-exempt sources, including individual car parts used in assembly or repairs.

Almost overnight, the tariffs increased the cost of imported cars on both sides of the Canada-U.S. border, adding several thousand dollars to the price of new vehicles already seen as unaffordable by many potential buyers. These price hikes were either passed on to consumers or absorbed by the automakers, affecting both new and used car markets. Even on vehicles still sold in Canada, tariffs disrupted supply chains, leading to longer wait times for new vehicles. As new car prices rose, more buyers turned to the used-car market, driving up demand and prices for pre-owned cars as well.

As we look ahead to 2026, the tariff story remains unsettled. While the legality of the announcement was debated in late 2025, there's no doubt that U.S. tariffs have affected Canadian car buyers' decision-making and will continue to be disruptive as we move forward.

U.S.Tariffs Forced Canadian Industry to Ramp up Military Production

While tariffs created uncertainty in 2025, they also led to what may be a return to automakers contributing to wartime production in this country.

You may be too young to remember, but Canadian car factories made a crucial contribution to the World War II effort. With civilian car production completely halted by early 1942, Canada's auto plants were fully converted to wartime production, manufacturing tanks, aircraft parts, and arms, including more than 800,000 military transport vehicles, exceeding the total truck production of Germany, Italy, and Japan combined.

As the conflict in Ukraine remains unresolved as of this writing, in 2025, the Canadian federal government launched a new strategy to integrate the automotive industry into Canada's defence industrial base. The government has specifically pointed to the potential for military-vehicle production at existing automotive plants.

As an example of how the sector can contribute to defence needs, in May 2023, General Motors showcased a Light Utility Vehicle (LUV) for the Canadian military, based on the Oshawa-made Chevrolet Silverado full-size pickup truck, a key initiative in launching GM Defence Canada’s efforts to “upgrade the logistical capabilities of the Canadian Armed Forces”.

For now, don’t expect a total shutdown of the industry like in 1942, as military contracts involve different engineering and market factors. But going forward, underutilized car plants may shift from personal use to military vehicles.

Canadians Lost Interest in EVs

This was also the year that a significant portion of potential buyers in Canada jumped off the electric vehicle (EV) bandwagon.

EVs made up 13.7 per cent of total vehicle sales the year before, but by early 2025, that had dropped to an average of 8.1 per cent. The percentage of people who said they would exclusively buy an EV dropped to 29 per cent in 2025, from 40 per cent in 2024, according to an AutoTrader survey.

While any vehicle with a battery had been a hot commodity for years, a long list of headwinds blew in to put the brakes on the EV-buying frenzy.

Affordability in 2025 remained a major concern for many new-car buyers — whether they were shopping for a gas-only, hybrid, or battery-electric vehicle. And that only escalated last year. According to AutoTrader data, the average EV was priced at around $63,000 compared to about $48,000 for a new gas-powered car. Although the majority of EVs sold in Canada are built in countries such as China, South Korea, and Mexico, the latest trade tariffs have led to higher prices, reduced vehicle choice, and greater market instability, especially for cars and parts from the U.S.

Citing economic instability and high costs, governments are also losing interest in EVs. The Canadian federal government’s $5,000 rebate program suddenly evaporated in March, along with provincial programs in British Columbia and Quebec in 2025. Looking ahead, the future seems even less cheery for EVs. In September last year, the federal government suspended its long-term EV mandate, a policy requiring automakers selling passenger vehicles in Canada to meet zero-emission sales targets of 20 per cent by 2026, and 100 per cent by 20235.

GM’s Canadian-Built Electric Van Ended Production

It’s not only electric passenger cars that buyers are passing over. High upfront costs, limited range and payload capacity, and significant challenges with charging infrastructure have also slowed the adoption of battery-electric commercial vehicles.

Take, for example, GM’s once promising BrightDrop Zevo 600 commercial van. Production at GM's Ingersoll, Ont., plant was halted this past May due to slowing demand in the commercial electric vehicle market. GM planned to restart operations in November, but with fewer workers and lower production levels. However, the U.S. automaker made the final decision to stop production of its BrightDop battery-electric commercial van in October due to a “changing regulatory environment and the elimination of tax credits in the United States” that made the business even “more challenging,” said the automaker.

Built in 1989,  the GM facility was initially a joint venture between GM and Japan’s Suzuki to assemble the Geo Tracker small SUVs for U.S. customers. GM launched BrightDrop in 2021 as a “full-service” logistics brand, integrating electric delivery vans, smart pallets and fleet management. In Canada, DHL and FedEx Express were early customers. Before production of the BrightDrop vans, the Chevrolet Equinox was the last vehicle produced at the Ontario facility.

At the end of 2025, GM had yet to announce what the future holds for the shuttered Ontario plant.

Buyers Faced Fewer New Vehicle Choices

It wasn’t only higher prices that left EV buyers wanting. Several models intended for the Canadian market, such as the Acura ZDX, Volkswagen ID.7 sedan, and certain Genesis, Kia, and Nissan EVs, were either put on hold or scrapped for the U.S. market, thus affecting Canadian availability, too.

Due to weak demand and inventory adjustments, GM temporarily halted or slowed production of several EVs, including its Cadillac Lyriq and Vistiq. At the U.S. plant expected to build a new version of the Chevrolet Bolt in late 2025, production will run only a single shift, indicating a delay to full production levels.

EVs were not the only vehicles being cancelled or culled.

Due to Canadian counter-tariffs on U.S.-made vehicles, several new models from Dodge (Hornet), Infiniti (QX60), Nissan (Frontier, Murano, Pathfinder), and Mazda (CX-50) have had production for the Canadian market paused.

If the trade dispute continues, automakers will need to make further adjustments as we head into 2026 and beyond.

New Pickups and Compact SUVs Remained Popular with Buyers

Despite the chaos and hardship Canadian car buyers endured throughout 2025, on the sales charts, pickup trucks and compact SUVs remained the top sellers of the year.

The Ford F-Series pickup truck family continued its decades-long reign as the top-selling truck family. At the same time, rivals like the GMC Sierra, Chevrolet Silverado, and RAM Pickup continued to be best-sellers. After the traditional truck options, other new vehicles that were top 10 sellers in 2025 included compact SUVs like the Toyota RAV4, Honda CR-V, Nissan Rogue, and Hyundai Tucson, along with the Honda Civic compact sedan and hatchback, and the Nissan Kicks subcompact SUV.