Chinese electric vehicle maker BYD is seeking to enter the Canadian automotive market, as revealed in a recent regulatory filing. This move coincides with Ottawa’s deliberation on imposing tariffs on vehicle imports from China.
Consultants representing BYD submitted
documents to Ottawa in late July to provide insight on BYD’s potential market entry into Canada for selling passenger electric vehicles and establishing a new business.
The submitted documentation also addressed the potential imposition of tariffs on electric vehicles (EVs) without specifying a timeline for BYD’s endeavors.
Despite attempts to contact BYD for comments, there was no response at the time of publication.
Ottawa initiated a 30-day public consultation on July 2 to gather feedback on the potential implementation of tariffs on Chinese EVs. Deputy Prime Minister Chrystia Freeland emphasized the necessity of this process to counteract “unfair competition” from China.
During a press conference on June 24, Freeland stated, “Chinese producers are deliberately creating a global oversupply that undermines EV producers worldwide, including those in Canada.”
Launching these consultations will facilitate collaborative efforts with unions, industry, and all levels of government to develop strategies ensuring Canada does not become a dumping ground for Chinese oversupply.
To address the potential rise in tariffs on Chinese EVs, Ottawa is exploring various policy options, including imposing a surtax under section 53 of the Customs Tariff, revising eligibility criteria for federal incentives in Canada’s
Zero-Emission Vehicles program, and potentially introducing broader restrictions in the country.
Tariffs on China
China has emerged as a significant supplier of EVs and batteries, partly due to increased government subsidies. By 2021, China accounted for nearly 80 percent of all lithium-ion batteries for electric vehicles globally. By 2023, approximately one-fifth of EVs sold in Europe were manufactured in China.
In May, U.S. President Joe Biden announced intentions to raise tariffs on Chinese EVs from 25 percent to 100 percent in response to this trend. Additionally, Biden pledged to increase tariffs on lithium-ion batteries and other clean energy products.
Following this, the European Union declared plans to elevate tariffs on Chinese EVs to 38.1 percent.
While Canada currently imposes a 6 percent tariff on Chinese vehicle imports, these cars qualify for rebates of up to $5,000 under the federal
Zero-Emission Vehicles program, which aims to have only zero-emission EVs on Canadian roads by 2035.
Amidst ongoing deliberations on potential tariff increases for Chinese EVs, Ontario Premier Doug Ford has urged Ottawa to take a decisive stand. Ford advocates for Canada to follow the U.S. lead by imposing a 100 percent tariff on Chinese EVs, highlighting how Beijing’s imports negatively impact Canadian jobs through exploitation of low labor standards and unsustainable energy practices.
Canada and the U.S. have been aligning their EV sectors in recent years, focusing on critical minerals, batteries, and EV manufacturing.
Canada has made substantial investments in the EV industry, allocating $30 billion over the past two years for EV battery and vehicle manufacturing facilities for
Stellantis, Volkswagen, and
Honda.
These efforts aim to safeguard North America’s auto industry from Chinese influence, which plays a significant role in both the U.S. and Canadian economies.
Reuters and the Canadian Press contributed to this report.
