Canada Set to Side with China on EVs
thewirechina.com43 points by eatonphil 3 hours ago
43 points by eatonphil 3 hours ago
Can anyone elaborate on why Canada has 100% tariffs on EVs? I think I know why the US does: lobbying by American automakers. Did the US threaten Canada unless they followed suit a long time ago, and is this change a sign that leverage is now lost?
Canada has a large car industry itself - 100% might be excessive, but every western nation now faces a choice between tariffs on EVs or letting their car industry be completely eviscerated with hundreds of thousands of job losses
They can also be incoherent. Don't know about Canada, but here in France we also have a bunch of auto manufacturers and the government seems completely lunatic with these policies.
On the one hand, there's a very strong push to reduce car usage. In Paris, the speed limit has been reduced to 30 km/h, 50 on the ring road, many lanes and parking have been removed to improve bike infrastructure. Then, when sales drop and jobs are on the line, those same people are absolutely shocked.
Now, personally, I'm all for reducing traffic in cities. I'm not particularly keen on breathing exhaust all day every day or getting run over by two tons of steel. Sure, a whole debate can be had on specific use cases, people living where there's no public transit, etc. But my point is that you can't, on the one hand, push for something, then be angry when you obtain the consequences.
Up until a few years ago, there was a very hard push for diesel engines. Local companies invested a lot in those. Now these engines are practically banned, and even gasoline ones aren't faring too well. So, automakers have to scramble to move to electric, but it takes time. While other companies, built from the ground up to this, already have models head and shoulders above what we can produce. And politicians, true to nature, come up with all kinds of weird incentives. They've recently introduced a weight tax on vehicles [0]. On the face of it, it's an "SUV-tax" to limit "gas-guzzlers". Cue surprised faces when they realize a Tesla weighs as much as an SUV (I'm talking European models here, so no absurd Escalades or what have you).
[0] This is France, so laws have exceptions. Electrics get an "allowance", which basically reduces the mass considered for the tax. But it's not entirely clear how that works. Ditto for hybrids.
> realize a Tesla weighs as much as an SUV
Umm, it doesn't? I'm assuming you're comparing Tesla non-SUV's to other SUV's. Tesla's aren't light, but they're lighter than most comparably sized SUV's. For example, a model 3 weighs 3800 pounds but a BMW X3 weighs 4200 pounds.
The Paris government reducing car usage in the city is not the same politicians that are subsidizing the national car industry.
I'm not convinced there's that big a of a difference as you seem to imply.
Most politicians aren't independent: they are members of parties and, generally, push for the same kind of policies, "the party line".
The Paris mayor is a member of a left party, the Parti Socialiste (PS). The same people who tend to cry foul when plants close down and people are laid off. This party is also more or less in some form of alliance with the Green Party who's also very much against cars. In the lower chamber no party has an absolute majority, but through (shaky) alliances, "the left" has the most seats (still no absolute majority, though). Also, many members of the President's party used to be members of the PS (including President Macron).
So, I'm pretty confortable lumping all these people together, since, broadly-speaking, they defend the same policies, even though there may be the occasional difference.
the third option is to force foreign companies to manufacture locally (which is often the case). It's kind of the best of both worlds.
We don't need to force anyone, toyota is happy making cars in Ontario. Kia/Hyundai/Hondas are everywhere on the road, all we needed to do is splash some incentive cash and we could cut out American automakers pretty quickly.
Unfortunately, those Japanese manufacturers are located here because of the American market, because even though there's a healthy domestic market... 80% of what they produce is exported to the US through NAFTA, etc. And they're also here because of the auto-parts supply chain that moves freely back and forth across the border.
The markets are heavily intertwined and have been for decades. E.g. Ford Canada is just as old as Ford in the US.
The problem with that is our auto employee salaries would drive the cost of the vehicle up.
We don't really have that kind of leverage, and our domestic market isn't large enough to make it compelling.
The “U.S.” car industry is actually the North American car industry. Factories are in Canada, Mexico and the U.S. primarily and parts move across the border duty-free. This dates back to the Auto-pact.
Canada almost certainly does not want to allow Chinese made vehicles to undercut their local producers. Any talk of this is just posturing and threats in the ongoing trade negotiations.
Trump says he wants every car sold in the United States to be made domestically.
The old integrated cross-border auto manufacturing system is over. Stellantis is already moving production of Jeep from Brampton to Illinois, and others are expected to follow.
Partially competition, as a couple of provinces have large car manufacturing. (Ontario and Quebec, mostly). Partially that there's no repair or maintenance infrastructure, nor guarantee a car will keep functioning if (say) the manufacturer shuts down or a model gets discontinued.
As to how much of which, that's a good question, and not one I've seen any answers to.
Because there are 0 Canadian EV manufacturers. Everything is (was) directly tied to the US strategy.
Canada has something like 500k jobs tied up in the automobile industry. This plays a larger role in the decision than “US strategy” but I am assuming with this stupid trade war it can tip the balance to reducing that tariff.
Carney also has to play a balancing act of western vs central Canadian interests. Oil & gas & canola are on the table here, and it's a dangerous situation. If we lean hard into trying to prop up Ontario's auto-sector we cause a serious crisis for prairie canola farmers, etc.
Both China and the US know this and are playing cat and mouse with us, fanning tensions, and the US is outright funding western separatists and encouraging grievance politics around their resource exports. The US has aggressively tariffed manufactured goods coming out of central Canada (and forestry out of BC) while leaving potash and oil & gas out of AB/SK untouched while simultaneously outright funding far right groups there that are are agitating against Canadian unity.
At the same time China has slapped tariffs on canola and made it clear that EV tariffs are part of the calculus there.
I don't see an easy way out of this. As a resident of Ontario I'd be sad to see the auto sector here go, and it would lead to massive economic devastation here ... but it feels entirely inevitable at this point. Not just because of tariffs but because the actual products from the Big3 automakers are increasingly mediocre and what they're producing here is on the whole not fine, sustainable, products anyways.
Car parts, and Honda & Toyota plants are another story, maybe.
The Canadian and American automotive industry was (until very recently) tightly integrated. 1 in 10 American cars were made in Canada, with parts going back and forth across the border sometimes multiple times in the assembly chain. The automotive sector is also a significant portion of Ontario’s GDP.
So a lot of incentive for Canada to side with America on this. But Trump blew up that relationship, and this is the consequence.
Because the Canadian auto industry is twin-joined to the American auto industry. A lot of parts that go to the American cars are made in Ontario.
Now, since his American majesty decided to throw away the Canadian auto industry we don't have anything to protect. Better to make deals with the Chinese now, before the whole American auto industry is destroyed.
It's a lapdog. You ask it to jump, it jumps. I guess not feeding him does make him rebel though.
You need to understand: for every tariff the US places on China, the more excess industrial capacity that China needs to direct elsewhere. It goes for steel, autos and more. This means, since America sanctioned Chinese steel, China has been dumping their steel into Canadian markets. With the excess electric car capacity unable to be absorbed by America, China wants to direct it elsewhere. If they start exporting to Canada, this excess capacity will completely destroy automotive manufacturing in Canada, leading to mass layoffs and entire industrial supply chains falling apart. This will inevitably lead to political instability as a large portion of second tier cities in Ontario start having a labour crisis.
This is evidently not ideal. I bore witness to manufacturing completely leave my hometown, third tier city over the span of a decade. Today, there is little economic opportunity in that town, with massive drug abuse, and petty crime. It used to be a nice place, and working in a factory earned you an honest living. Unfettered trade with China killed places like this, destroying an entire generation.
At the end of the day, wanting electric cars from China depends on your values, do you want incredibly cheap electric vehicles, even if it means destroying an entire industry that the largest province in the country relies upon? Or do you want to maintain a functional manufacturing base that is critical to political and social stability?
The current Canadian prime minister is Mark Carney. He is an international banker. I think you have your answer.
Good. There's nothing else stopping EVs from mass adoption besides these artificial barriers. You cannot undermine progress forever. I bet the auto factory workers are told they are supposed to feel upset about this. They should feel upset, because their government hasn't addressed the global shift to EVs sooner.
This is unkind and also factually wrong.
Canada literally has an EV mandate: https://tc.canada.ca/en/road-transportation/innovative-techn...
Canada has also worked on developing an EV industry: https://electricautonomy.ca/ev-supply-chain/manufacturing/20...
Developing an EV industry depended on US cooperation. That cooperation is gone since Trump was elected.
Canada is not really independent of the USA. The better way to view this is that Canada is like California. This is not a battle between countries but an internal civil conflict within the hegemony.
And your reply does not touch on the 'unkind' portion of my comment. Why should those workers suffer more than they already have?
Mass adoption of EVs is inevitable anyway. It's just a matter of being say 5 years behind China. Even if those 5 years now look like 10% vs 50% market share, in 10 years they will mean nothing.
This is the wrong take. Economic dependence on China is a massive national security threat. Exporting your manufacturing base to a nation that opposes the fundamental values of a nation is completely suicidal, and if war ever occurs, you’re toast. China is increasingly belligerent with their excess industrial capacity, engaging in dumping and overproducing to cut out competing non-Chinese manufacturers. They engage heavily in IP theft.
Allowing critical manufacturing supply chains to move to China is stupid.
> Exporting your manufacturing base to a nation that opposes the fundamental values of a nation is completely suicidal
How do you feel about integrating your manufacturing base with a nation that opposes the fundamental values of our nation, and constantly fantasizes about annexing our nation?
Unless you're arguing for Canada to make its own EV manufacturing industry independently from both China and America?
What's the alternative to Canada? To be depended on the states who, very openly, threaten them on every possible occasion?
Unfortunately, it's not 2000s/2010s anymore, and rules of the game have changed. Most countries realize that there is a future that's not purely Pax-Americana (including USA as well). Sovereign nations will choose what's best for them and their future, especially in the cases of a neighbouring bully.
Serious question: hasn't the western world largely exporting their manufacturing base to China for everything, just not EVs/batteries? There is a major conflict here between corporate profits vs national security. Consumers generally don't care about vague concepts like national security if it makes things cheaper.
It’s a tragedy of the horizon (if I may use the term coined by the Prime Minister). Basically, corporations and democratic countries are more focussed on the short term, such that long term concerns like national security, climate change etc… are not appropriately integrated into risk models.
Palmer Lucky touched on this last week - how China would love to slowly winnow away American automobile manufacturing capacity, because that capacity would be converted to wartime production in the event of a large scale war.
> This is the wrong take. Economic dependence on China is a massive national security threat.
and instead dependence on the U.S.?
China has been a stable and reliable trading partner with Canada for a long time. Canada is far too small a country to produce everything it needs within it's own borders. If anyone ever declares war on Canada then we're toast, so we're best not going out of our way to make enemies with the world's dominant superpowers –one of which is actively threatening our sovereignty.
China is always willing to dump, tariff and subversively coerce its way into hollowing industries. This is not stable nor reliable. It is aggressive and a national security threat.
They infiltrate civil society through their networks of “police stations” and the Confucius Institute with the aim of placing sycophants in positions of power.
They aren’t our friends, and Canadian civil society needs to recognize that.
> China is always willing to dump, tariff and subversively coerce its way into hollowing industries.
So, you are saying they arw like USA right now, except more predictable?
They especially aren't our friends if we go out of our way to make enemies with them. Why would we do that? It doesn't make any sense. It's a small world, China isn't going anywhere, we're stuck living on the same planet as them. They aren't going to have less of an influence on our affairs in the future going forward.
Canada has a long standing problem. The only thing we've ever been good at is natural resource extraction. Ironically we have several world class universities producing very talented people and IP, and the vast majority of it goes to the states to make money. Then here in Canada we carry on digging stuff out of the ground.
The problem is that as of now, the dependence on USA is more destabilizing. It is a country that has fundamental values difference against Canada, threatened Canada just recently and if war occurs, it is huge issue for Canada.
Canada already isn’t economically independent. Diversification is fine, especially if it saves costs that can then be deliberately redirected towards improving sovereign capabilities. Right now we have the worst of both worlds, we pay top much for stuff or can’t get it, and remain completely dependent on the US and China.
We could and should further diversify by removing whatever barriers are keeping European cars out.
Europe has barriers keeping Chinese cars out because otherwise they couldn’t compete.
Why should Canada rely on an inferior manufacturer?
Because their are no Canadian car companies.
How is that related to allowing European car manufacturers in but not Chinese ones?
First, dependence on the US hasn’t exactly worked out very well for us the past year. As a smaller nation, Canada has to be dependent on its trade with more powerful nations, and that comes with risks regardless of what nation we’re dependent on.
Second, I don’t buy your fear mongering about China. There’s not much fundamentally different about China and western nations in 2025. They’re a capitalist society prioritizing growth at all costs, same as every other western nation. China is not interested in war, and has stated that consistently over the years.
Third, as far as “critical manufacturing supply chains” go, extremely inefficient luxury personal vehicles don’t fit that definition.
The neoliberals didn't care about national security when they shifted the manufacturing and jobs to China for profit. They were outplayed by the Chinese.
My anger lies with the neoliberal elites not the Chinese. The elites can go die on the battlefield. Its their mess.
>Good. There's nothing else stopping EVs from mass adoption besides these artificial barriers.
EVs arent able to function in -40c That happens in Canada every year.
Anything under 0c has risk of freezing the lithium battery's electrolyte and will have very very significant capacity loss; not to mention damaging cells. That's a huge problem for Canada.
I look forward to solid state batteries having far better low temp performance.
Our northern most cities like Edmonton get to -40c and -50c regularly: https://www.cbc.ca/news/canada/edmonton/alberta-extreme-cold...
Fair, yes, my city only ever really gets down to -20c. Yes I own an EV that's outside 365.
To expect much EV adoption in Canada is foolish though.
>hey should feel upset, because their government hasn't addressed the global shift to EVs sooner.
Our government has heavily invested in EVs for like 15 years. This is a bizarre take.
Are you seriously suggesting that Chinese automobile companies exporting to Europe and possibly North America are oblivious to the existence of winter? Their own country has cities like Harbin where temperatures can reach -35.
This is just outright FUD from this person. Or just ignorance combined with a need to be heard, I don't know.
I lived in Edmonton and surrounding rural Alberta for the first 25 years of my life, the most northern and cold major city in the country and it does not get to -40 unless you're counting wind chill, and cars don't feel wind chill, people do.
An EV has no real problems operating in typical Canadian weather, less problems than a gas car in fact. Yes, they lose efficiency but so do gas and diesel vehicles.
And sodium ion batteries are now entering mass production, which have no efficiency loss in extremely cold weather, and in fact will outperform ICE in this regard (though their power density is lower than lithium ion)
Maybe not -40C, but honestly that's not required to capture a huge chunk of the Canadian market (BC around Vancouver, and SWO Ontario).
China has significant climatic variation, and Harbin (for example) at around 45 degree latitude is right in line with Montreal.
https://english.news.cn/20230712/a56c80cac8e749f0bcf02579463...
Canadians love to exaggerate how cold it gets.
None of the 4 biggest Canadian cities have EVER had -40C temperatures. No, wind chill does not count.
In fact, most years they’re not even getting to -30C, and if it does happen it’s only for 1 to 2 days. The rest of the time you’re dealing with average -10C, which China also regularly deals with. But guess what, even if you can’t use your EV one day out of 364 days that’s not that big a deal. Most people should just stay home that day.
The source is I’m Canadian and lived in Ottawa for a decade.
Not just the 4 biggest. None of them... unless you're counting the far north. Maybe Fort Mac in an extreme cold spell, but even there it would be only overnight and extremely rare.
And also an EV would work just fine, just with lower efficiency.
I love how you went back and edited post-facto to try to shore up your claim. Come on.
Edmonton, where I'm actually from, has had record lows of -40, but these are extreme outliers. When people speak of -40 in Edmonton they mean wind chill, not real temps. Look at a scatter plot of actual temperatures in Edmonton and it's really not the drama you're implying.
Cold climate is not the barrier to EV adoption. Pricing (and politics) is. Anywhere in the world where EVs have been price competitive to ICE vehicles, consumers have preferred them.
There are political / economic interests in Canada (and North America generally) that absolutely do not want EV adoption. One would expect that from an oil&gas producing nation. Doesn't mean that reasonable people who understand that climate change is an actual thing should support this position.
Not "set to", more like "considering to". But I very much hope we do it.
Cons: it will probably be the death sentence to the Canadian auto industry.
Pros: the gas engine auto industry is dying already anyway, with or without a deal with the Chinese. Besides, if we make the deal now, at least we can sell canola and pork to them.
It already has a death sentence on the calendar: 2035
This is a direct response to tariffs. Canada is done playing nice with its big jerk trading partner and will be opening its options to achieve this goal if the tariffs aren't lifted.
"its big jerk trading partner" = USA?
It's not clear from that sentence who you mean, so I was clarifying.
Worth considering at least, and looking at approaches like you mentioned and avoiding allowing free entry of foreign vehicles. We could consider partnerships (if China is interested) like we have with other foreign manufacturers like Honda and Toyota. We should also be considering expanding the existing relationships, though I'm sure there are retooling costs, and possibly playing hardball with other manufacturers to encourage them to setup shop (e.g. Kia/Hyundai).
I doubt I'm offering anything that hasn't been part of discussions already, but having the ability to manufacture vehicles seems like an area of industrialization a country shouldn't part with lightly.
This will be a boon for canola farming.
Better invite them to split production 50/50 on land.
Good. The Western world needs to get over its China-fetish.
So here's the thing. We dont have free trade with China and Auto manufacturing is something have the resources to do and export. The tariff will be something and it's going to be high because we protect our jobs and markets. Not to mention heavy investment from the government. Canada produces far more cars than we need for ourselves, it's an export focus.
China then tariffed us on canola for example; but the Federal liberals arent going to melt down Ontario for the benefit a few thousand western farmers who will never vote liberal.
Counterpoint though, stellantis and GM are essentially exitting Canada due to Trump. Essentially every single car manufacturer has commented they are exitting Canada and we're penalizing them all. Has trump forced us into the hands of China and Europe?