Canada is set to impose a 100% tariff on Chinese EVs, following similar moves by the US and Europe. The move comes just as China’s largest EV maker, BYD, prepares to enter Canada.

Prime Minister Justin Trudeau told reporters on Monday that Canada will enforce a 100% tariff on Chinese EVs.

The sanctions mirror similar moves from the US and Europe to “protect domestic manufacturing” from the threat of low-cost EVs from China.

Last week, the European Commission announced new tariff rates as part of an ongoing investigation into Chinese electric car subsidies. The new EU import tariffs range from 9% to 36.3%, down from the initial 17.4% to 38.1% proposed in June.

Tesla and BYD were among the companies with rate drops. Tesla was the biggest winner, with its rate import rate dropping from 20.8% to just 9%. BYD’s rate was cut from 17.4% to 17%.

Canada will follow the US, its biggest trade partner by far, in enacting a 100% tariff rate on Chinese EV imports.

BYD to face 100% tariff in Canada

The update comes as China’s largest EV maker, BYD, preps to launch vehicles in Canada. BYD is already a leading EV brand in Mexico, but entering Canada could shake up the North American auto market.

Although BYD has not officially announced the news, a regulatory filing (via Reuters) in the country last month revealed it was moving closer.

BYD Canada also met with government officials and inquired about opening retail locations with dealers.

The Chinese EV maker is already making its presence known in Mexico after delivering its first batch of 100 Yuan Plus models last summer.

In May, BYD revealed its first pickup truck, the Shark PHEV, in Mexico. Starting at 899,980 pesos ($53,400), BYD’s pickup will challenge top-selling models in the region, like the Ford Ranger and the Toyota Hilux.

BYD is also closing in on a deal for a new plant in Mexico as it expands its North American manufacturing footprint.

BYD’s America CEO, Stella Li, has already said the company has no plans to sell passenger EVs in the US due to its “confusing” politics. However, it already sells its electric buses in the States.

Trudeau said the new tariffs on Chinese EVs will go into effect on October 1, 2024, to “level the playing field for Canadian workers.” The tariffs will apply to electric and select hybrid passenger cars, buses, trucks, and delivery vans.

Currently, Tesla is the only automaker selling Chinese-made EVs in the nation. However, several Chinese auto leaders, including BYD, are eyeing the Canadian market.

Electrek’s Take

Canada is following the US in imposing a massive 100% tariff rate on Chinese EVs to “protect” domestic workers.

Meanwhile, American automakers, including Ford and GM, are delaying or canceling major EV initiatives altogether, which could put them further behind the industry.

Ford canceled plans for its three-row electric SUV. Even if Chinese EVs face a 100% tariff, other overseas automakers like Kia and Hyundai are already gaining ground in the US. Hyundai, including Kia and Genesis, topped Ford and GM as the second-best-selling EV brand in the US in the second quarter.

Meanwhile, BYD topped Honda and Nissan in Q2 to become the seventh-largest automaker globally.

With low-cost EVs, like the Seagull, which starts at just $9,700 (69,800 yuan) in China, BYD is quickly catching up to America’s “Big Three.”

Ford has shifted plans to focus on smaller, more affordable EVs as it looks to keep pace with Tesla and Chinese OEMs. CEO Jim Farley has praised BYD’s vehicles in the past, calling the Seagull a “pretty damn good car.”

Farley has warned that if Ford or its rivals cannot keep up with Chinese EVs, then profits and market share are at risk. Ford’s leader said that if the company fails to compete, it will shrink into just the North American market.

Source: AP News