Will Chinese Electric Vehicles (EVs) Entice Canada Amidst Ongoing Trade Wars with the U.S.A?

At the moment, China's electric vehicles are excluded from Canada due to a 100% tariff. However, the recent trade conflict initiated by the U.S. makes the idea of a deal with China seemingly enticing. The rising tension between the U.S. and Canada, coupled with tariffs on Canadian industries including automobiles, dairy, and lumber, has strengthened a push for separation from the U.S. at both grassroots and policy levels.
A potential switch to China for automotive imports does not come without precedent. Certain models of Tesla vehicles in Canada are actually sourced from Shanghai, not the states of California or Texas. Furthermore, the first China-produced Volvo EX30 was received by Canada before the U.S. These instances suggest that a shift towards Chinese EV and plug-in hybrid electric vehicles (PHEVs) in the Canadian market is plausible.
Despite the seeming feasibility, the move may not be beneficial to Canada's auto industry. Robert Karwel, J.D. Power Canada's Director of Customer Success Data & Analytics Division, notes that Canada has made significant investments in EV production. Major players such as Stellantis, LG Chem, Volkswagen, General Motors Ford, and Northvolt have all set up shop in the region. Thus, turning to the Chinese for their affordable electric cars may potentially be detrimental to their local industry.
Karwel hopes that the ongoing economic tension will eventually ease, with the relationship between the two neighbouring countries returning to its original state. However, no prediction is definitive as uncertainties continue to mount. The recent addition of a 25% tariff on all Canadian goods by the Trump administration, carving out exceptions only for Stellantis, Ford, and General Motors, continues to complicate negotiations.
In this increasingly volatile landscape, the prospect of affordable Chinese EVs entering the Canadian market seems tempting indeed.