Clean Energy Canada | In the battle over Chinese EVs, Canadian families are collateral damage
August 29, 2024

Imagine a family. The parents are in their midthirties, with decent, middle-management jobs. They have a young kid with another on its way. And like many families their age, they’ve saved and saved and reconfigured their expectations more than once, but now with baby number two, condo life just won’t cut it.

So they’re buying a townhome in Brampton, a little farther out than they’re used to, because in this economy you drive until you qualify.

They would love to buy an electric vehicle. Their new commute isn’t very transit-friendly, and with two kids, they like the idea of a car that saves them hundreds on gas every month while minimizing their carbon footprint.

They especially like the idea of an affordable hatchback — a practical city car with plenty of trunk space — but their budget is fixed. Yes, they know an EV will save them money eventually, but they’re about to take out a giant mortgage, those pesky student loans still haven’t quite been quashed and there’s a little something called debt-to-income ratio that could impact what kind of home they’re approved to buy.

They’d had their eye on a Chevrolet Bolt — the bestselling EV in the country not made by Tesla — only to learn that Chevy is pausing production of the affordable hatchback until model year 2026. That timeline doesn’t work for them and there’s nothing else on the market that competes with the Bolt on price and range.

They feel frustrated. They feel abandoned. They feel “like the EV industry doesn’t want me,” in the words of one writer.

The problem? As auto industry analyst Kevin Tynan recently explained to InsideEVs, car companies do not exist to make cars. They exist to make money and that’s an important distinction for understanding the frustration of the above-mentioned family.

A shift to larger, more profitable vehicles has not only driven up climate pollution in this country, it also explains why many affordability-constrained Canadians feel marooned in today’s car market — and that’s doubly true if you’re on the market for something electric.

Enter the prospect of cheap, Chinese-manufactured EVs.

The federal government could have taken a balanced approach to a complicated issue: one that considered not only the priorities of traditional automakers and Canada’s domestic industry but also the needs of affordability-constrained Canadian consumers and our climate.

We could have applied a middle-ground tariff that considered multiple interests, as Europe has done through a series of consultations and automaker-specific amounts ranging from nine to 36%. Certainly, we could have lessened what will now likely be a strong retaliation from China, our second-largest trading partner.

Instead, we took our cue from the U.S. (and perhaps a push from the consistently protariff Conservative Party of Canada) with a shut-and-lock-the-door 100% tariff, a decision already receiving considerable pushback from America’s clean energy sector.

Unfortunately, it’s not just China that loses out.

Canadian drivers enjoy a better car market because Japanese and Korean automakers made it a more competitive one a few decades ago, a move that was met at the time with similar protests. The comparison isn’t a perfect one, but a more balanced tariff could have both protected our burgeoning industry while still letting in a little competition on our terms — a little something for the lowly consumer.

EVs represented 24% of all vehicle sales in Europe in 2023 and this spring hit 44% in China, compared to just 12% in Canada last year. Europeans can choose from no less than 11 different electric options with a purchase price of less than $45,000 (only one of which is Chinese), versus only two such models in Canada. The cars exist. They just don’t exist in Canada.

Perhaps it’s no wonder that more than half of young Canadians feel like the system is rigged against them. Intended or not, it so often seems to go that way and certainly working parents would benefit, especially from fuel savings. In a poll Clean Energy Canada conducted with Abacus Data, Canadians between the ages of 18 and 44 were most likely to realize that EVs are long-term money-savers.

Hopefully, the feds will employ a more thoughtful approach to their upcoming consultations on other parts of the EV supply chain. Add to that EV incentives from the Ontario government and cross-partisan support for the federal Electric Vehicle Availability Standard, which if kept in place could drive down EV prices by 20% as the industry is forced to produce more affordable electric models in order to meet its targets.

North American automakers have presented China as a sort of Goliath to their David. But the real Davids — Canadians like the family above — just want an affordable EV to make their life a little easier. A 100% tariff sends a clear message, indeed: we forgot about you.

This post was co-authored by Rachel Doran and originally appeared in the Toronto Star.