Canada takes step to grow EV market and strengthen auto sector

TORONTO — ADAM THORN, director of the transportation program at the Pembina Institute, made the following statement in response to today’s announcement regarding tariffs on Chinese-made electric vehicles.

“Canada is opening its market to more Chinese electric vehicles (EVs), allowing 49,000 EVs at a 6.1% tariff rate. The quota will rise about 6% per year, reaching 70,000 within five years, with half of the 2030 quota reserved for EVs priced under $35,000. This is a relatively small fraction of the 1.7 million vehicles sold in Canada in 2024, but it reflects the government’s efforts to make EVs more affordable for Canadians while balancing consumer choice, climate goals and long-term competitiveness in the auto sector.

“This is a positive step that helps make EVs more affordable for Canadians at a time when cost remains the biggest barrier to adoption. EVs can save consumers up to $40,000 per vehicle over 10 years on average, thanks to lower maintenance and fuel costs. Allowing more lower-priced EVs into the Canadian market supports consumer choice and helps unlock demand, ensuring Canadians have access to the same range of EVs already available in other major markets. It also aligns Canada with where global automakers and consumers are already headed, as EV adoption rapidly accelerates globally. Transportation accounts for 22% of Canada’s emissions, second to oil and gas, making EV adoption a critical part of achieving Canada’s climate goals.

“Strong and sustained EV demand is essential to the long-term competitiveness of our auto sector. When affordability improves, demand follows, attracting investment, supporting innovation and securing good-paying jobs across the EV supply chain. Complementary measures, such as the EV Availability Standard (EVAS), are essential regulations within Canada’s broader EV strategy. They help bring down vehicle costs, support consumer demand for EVs and keep the auto industry competitive by aligning Canada with global markets. The slow increase in import quotas creates competition to encourage automakers operating in Canada to produce low-cost EVs. If EV adoption slows because prices remain out of reach, or in the absence of reliable long-term policy certainty, investment decisions and production timelines are put at risk, slowing the growth of Canada’s EV sector and the jobs it supports.

“Growing EV demand in Canada also underpins the case for building out Canada’s supply chains, including battery critical minerals, where Canada has a real economic opportunity to compete. EVs are a leading driver of new demand for the minerals used in batteries. Without a growing EV market, that demand and the opportunity it creates for Canada would be much smaller.

“The Canadian automotive manufacturing sector is under pressure. The source of that pressure is U.S. trade policy, not Canadian regulation designed to increase the availability of zero-emission vehicles, such as the EVAS, or the entrance of a small number of Chinese vehicles. Over 80% of the vehicles manufactured in Canada are exported to the U.S., leaving the industry exposed to U.S. volatility. Canada’s next step must be to engage strategically with China to secure manufacturing partnerships that can replace jobs tied to U.S. exports with new opportunities in Canadian EV production.”

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