Electric Vehicle | Canada Eager for Cheap Chinese Electric Cars, but Policies Still Wavering

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Electric Vehicle | Canada Eager for Cheap Chinese Electric Cars, but Policies Still Wavering

Date：2024-08-26

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Keyword tags： EV Policy North America

The Canadian federal government is currently considering whether to follow the United States and its allies in imposing tariffs on Chinese electric vehicles. However, Canadian media outlet CBC reports that recently, some Canadians have said they would seize the opportunity to buy cheaper Chinese-made electric cars.

The Canadian government held a month-long consultation in July on how to deal with China's strong influence in the electric vehicle sector. Tariffs are one of the options on the table.

But early electric vehicle users such as Michael Wawrykowicz living in Edmonton and Barbara MacLellan living n Colwood, British Columbia are in support of China electric vehicles to enter the Canadian market.

Michael Wawrykowicz said that if the price is right, he would be more enthusiastic about buying electric cars with a longer range from China. He called for support for the import of low-cost electric cars from China on the only national program Cross Country Checkup.

Price is the key reason. The cheapest electric car in Canada starts at about CAD 38,000, compared to the Seagull, which BYD launched last year with a range of 305 kilometers, starting at only about CAD 14,600.

Barbara MacLellan regards that the influx of Chinese electric cars will help stimulate competition in Canada and believes that traditional Canadian car manufacturers have been slow in electrification, while the issue of increasingly apparent climate change is attracting more and more attention.

However, others oppose opening the market to Chinese electric cars, citing concerns about safety or the human rights issues that Western media often purposedly distort about China.

However, CBC refuted this, citing data from the International Energy Agency that China's carbon dioxide emissions account for about one-third of the world's total, but at the same time, China has become a global leader in solar and wind energy as well as electric vehicles. The International Energy Agency believes that "there is no reasonable way to limit the global temperature rise to 1.5 degrees Celsius without China." In addition, CBC also mentioned a recent report from the Finnish think tank Centre for Research on Energy and Clean Air, which predicts that 2024 may be the year when China's carbon emissions begin to decline.

The Canadian federal government began consultations in July to determine how Canada can best prevent an excessive influx of Chinese electric cars into the Canadian market. The government consultation period of the Ministry of Finance ended on August 1, and the discussion included whether electric cars made in China should be eligible for incentives for zero-emission vehicles in Canada, such as whether Canadians who buy or lease Chinese-made electric cars should be provided with a rebate of up to CAD 5,000.

The leader of the Conservative Party hopes that Canada will maintain the same tariffs on Chinese electric cars as the United States. A spokesperson for Finance Minister Chrystia Freeland, Katherine Cuplinskas, has publicly stated, ‘All (policy) options - including additional taxes - are on the table to protect Canadian workers and the electric vehicle supply chain from China's intentional, state-led overcapacity policy and unfair competition due to a lack of strict labor and environmental standards.’

Industry groups such as the Canadian Vehicle Manufacturers' Association have warned that if Canada's electric vehicle industry is not protected, it will face serious risks. According to a report from the Canadian Parliamentary Budget Office on June 18, since 2020, Canada has attracted more than CAD 46 billion in investment for 13 electric vehicle, battery, and battery component manufacturing projects, including Northvolt and Volkswagen. In addition, Ottawa and the provinces have jointly committed to providing up to $53 billion in various expenditures for these investments, including tax credits, production subsidies, and capital investments. If this industry is not protected, it will bring direct economic risks to Canada. ‘If we do not take action now to allow these facilities to come online and allow manufacturers to build their production capacity, we will put all investments at risk.’

Earlier this year, due to concerns about devastating the US electric vehicle industry, the United States decided to impose a 100% tariff on Chinese electric cars, much higher than the previously planned 25%. The European Union has also recently issued a final ruling on anti-subsidy investigations against Chinese electric cars, with additional tariffs on Chinese electric cars reaching up to 36.3%.

However, some environmental organizations such as "Environmental Defence" believe that preventing Chinese electric cars from entering the Canadian market will make Canadian electric cars more expensive, thereby delaying Canada's transition to a low-carbon economy. Last year, the Liberal Party promised to stop selling gasoline and diesel cars by 2035.

At present, the only Chinese-made electric cars imported into Canada come from Tesla in the United States, produced in Tesla's Shanghai factory, with Canada imposing a 6% tariff. However, domestic car companies, including BYD, have also started to pay attention to the Canadian electric vehicle market. CBC mentioned that the Canadian federal lobbyist registry shows that the company hired a consultant last month to provide advice on ‘BYD's expected entry into the Canadian market’ and the application of electric vehicle tariffs.

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