Chinese-made Teslas flood Canada, drawing protests and calls for higher tariffs to protect local industry
The Biden administration is increasing US tariffs on electric vehicles (EVs) manufactured in China, as reported by BNN Bloomberg.
Despite this, Chinese-made cars are still entering the North American market, particularly in Canada.
Canada is experiencing a surge in imports of Chinese-made EVs, especially Tesla Inc. models produced in Shanghai. The number of cars arriving from China at the port of Vancouver increased more than fivefold last year, reaching 44,400, after Elon Musk’s automaker began shipping Model Y vehicles from there.
This situation has led to protests from some auto-industry players who are urging Prime Minister Justin Trudeau to protect the domestic industry by following the White House's lead.
Canada imposes a small tariff on Chinese-made vehicles, about six percent, and allows consumers to use a federal rebate program when purchasing foreign-manufactured EVs. Since Tesla started exporting from its Shanghai factory last year, many purchasers have used that incentive.
“Here you can buy a Tesla made in Shanghai and get a $5,000 purchase incentive that is funded by Canadian taxpayers — including the Canadian companies who are competing with Tesla for that vehicle purchase,” said Flavio Volpe, president of Canada’s Automotive Parts Manufacturers’ Association, in an interview.
“We’ve raised this publicly, we’ve raised it privately, everything short of yelling at the moon from the top of a mountain to get somebody to close that door. And it’s wide open. It’s noticed in the US”
Officials with Canada’s transportation department did not reply to requests for comment.
Three out of every ten EV buyers requesting Canada’s federal rebate in the year ended March 31 bought a Tesla, according to data from Transport Canada, totalling about 51,000 cars. Some provincial governments, like British Columbia, offer additional rebates worth thousands of dollars to EV buyers.
Canada is still a relatively new market for Chinese-made vehicles compared with Mexico, where companies like BYD Co. and Anhui Jianghuai Automobile Group Co. have made significant inroads over the past decade with relatively cheap cars.
Among Asian countries exporting EVs into Canada, Japan and Korea continue to dominate.
As in the US, electric vehicles remain a small part of the Canadian auto market. Canadians registered about 185,000 battery electric and plug-in hybrid electric vehicles last year, an increase of nearly 50 percent from the year before, but still only 11 percent of all new vehicle registrations.
The subsidies for purchasers aim to increase that number. Trudeau’s government has set an ambitious target: 60 percent of all new light-duty vehicles sold in the country should be zero-emission by 2030, and 100 percent by 2035.
Volpe and others believe this target is too aggressive and that Canada’s goals should be more closely aligned with the US.
The Biden administration’s recent auto-emissions rules could potentially boost battery electric vehicles to more than 50 percent of the market by 2032, according to modelling from the US Environmental Protection Agency.
Teslas sold in Canada come from Shanghai or Fremont, California, according to the company’s Canadian sales centre. The company declined to comment on how many vehicles exported to Canada originated at each plant.
Customers can request the manufacturing location from the company or find it with their vehicle identification number.
Canadian car dealers have noticed a growing number of Teslas manufactured in China appearing on the used car market, according to Huw Williams, a lobbyist for the Canadian Automobile Dealers Association.
He expects the disparity between Canadian and US policy to become increasingly important.
“A legitimate question for Canadian policymakers to address is how the Biden announcement and how some of the influx of products from overseas — which countries it’s coming from — affects the Canadian mix,” Williams said.
“I think you’re going to see more and more attention paid to that issue here in Canada as a result.”
