The announcement marked another departure from policies backed by his climate-focused predecessor Justin Trudeau, but Carney said he wanted to incentivize EV production while bolstering a Canadian auto industry hammered by US tariffs.

Since replacing Trudeau last year, Carney has also scrapped the former leader's carbon tax on individual households and advanced plans to build a new oil pipeline from Alberta to the Pacific coast -- infuriating environmental groups.

Asked Thursday if he still considered Canada a leader in the fight against climate change, Carney said: "Absolutely."

He stressed his climate policies would be focused on "results and solutions."

Trudeau had passed legislation mandating that 20 percent of vehicles sold this year be electric, with a 60 percent target by 2030 -- benchmarks that faced criticism from automakers.

While he pivoted away from those mandates, Carney stressed that the future strength of Canada's auto industry required a transition to EVs.

"We know where the auto industry is headed. We're going to support that transition," he told reporters.

Carney said his goal was 75 percent EV sales by 2035, and a 90 percent target by 2040.

To get there, he has earmarked CAN$3 billion ($2.2 billion) "to help the auto industry adapt, grow and diversify to new markets," his office said in a statement.

Carney said his goal is to position "Canada to become a global leader in electric vehicle (EV) production."

Underlying the strategy was the need to prepare the Canadian sector for a future where the highly integrated North American auto sector is transformed by US tariffs, Carney said.

"There's no greater symbol of how closely the Canadian and American economies have been intertwined than automobiles," the prime minister said.

"The average car is built from parts that travel across our border up to eight times before landing on the showroom floor," he added, while warning: "That trade relationship that once was a great strength has now become a serious vulnerability."