Canada to join the ‘China-free’ EV market

Assiduous EV inFocus readers will already be aware of our future assumption of a three-speed global EV market: a US market where all-electric offering must be free of Chinese elements within their production; markets such as Europe that will be calibrated to allow some Chinese involvement but with an aim of preventing Beijing from gaining leverage over their car supply; and places where Chinese products will be sold without restrictions.

Given that the US has already laid the groundwork for a market of sufficient size to ensure that China-free BEVs will be developed, it thus makes eminent sense for Canada, its northern neighbour, to expand the scope of this customer pool by applying similar restrictions on Chinese involvement in its auto industry. This is particularly true considering Canada’s potential to build its own battery metals mining and processing plants to serve new gigafactories and EV manufacturing both at home and in the US.

And it is making moves to do exactly that, with Canadian prime minster Justin Trudeau announcing that a 100pc tariff on Chinese-made EVs would be arriving “shortly”, along with 25pc duty on Chinese steel and aluminium.

“Today, we are taking yet another step to ensure that Canada is THE country of choice to make the things that will drive the new twenty-first century green economy,” Trudeau says. “We are listening to automakers; we are listening to workers.”

Admittedly, Canada’s least wealthy car buyers who might want to switch to BEV may be short-term losers under the policy, with the prospect of low-cost Chinese imports being further diminished. But few options for western nations faced with the current dominance of China in EV manufacturing and the global political threat posed by the Chinese Communist Party are win-win, while used BEV prices — the market in which many of the most cash-strapped buyers are active — are unlikely to be significantly impacted by Trudeau’s move.

And the geopolitical and industrial logic of the policy is inescapable. The ‘China-free’ market will be enlarged, and a Canadian battery supply chain to serve both it and markets such as Europe that will want friendlier alternatives to Beijing among their options will be bolstered.