Canada has bet big on electric vehicles. Until recently, our auto pact partner and trade ally, America, had too. But with Trump rolling back EV policies and threatening 25 per cent tariffs that would shock Canada’s auto sector and the broader economy, what’s Canada to do?
While certain politicians to the south are making a misguided detour when it comes to EVs, Canada can still drive forward with a clear and long-term view.
Trump has begun the process of rolling back American tailpipe emission regulations that require carmakers to improve the fuel efficiency of the vehicles they sell year after year. His move will deprive American drivers of $46 billion in annual fuel cost savings and nearly $16 billion in reduced maintenance expenses.
Killing the EV tax credits and applying tariffs would raise costs for drivers further still. Far from solving America’s “energy emergency” by “cutting energy prices in half,” Trump is forcing Americans to buy less efficient gas-powered vehicles and pay more to fuel them.
Canada need not merely intend to survive Trump. We can, and should, aim to have it better, both as consumers and builders.
Canada will be in good company if we stay the course on EVs. California remains committed to EVs and is fighting to preserve its own clean car standards, which 17 other states representing 40 per cent of the U.S. car market follow. The state also pledged to bring back its EV purchase incentive program if Trump cancels the federal one.
Staying the course also ensures Canadian drivers — threatened with tariff-induced gas price rises — have more opportunities to save thousands of dollars per year while being insulated from price shocks at the pump. Plugging into cheap, clean, consistently priced Canadian electricity offers a level of energy security worth highlighting at times like this.
What’s more, maintaining measures like the federal EV availability standard, which requires carmakers to bring more and more EVs into Canada’s market, will give Canadians access to the best selection of vehicles.
Kia’s new EV5, for example, expected to be priced in the $40,000s, is coming to Canada but not America. When was the last time something cool came here first? Forward-looking policies mean more choice for Canadian consumers.
And measures to support EV uptake aren’t just good for consumers. They can even the playing field for domestic automakers too. It’s why America’s big three carmakers urged the Trump administration to keep the tailpipe regulations in place: to prevent cheap, inefficient gas cars from undercutting their efforts at a time when the transition to EVs is integral to their long-term survival.
Indeed, one-in-five cars sold globally is now electric and in China it’s closer to one in two. In other words, China will dominate the global EV market if automaking nations, including Canada, do not play catch-up, and quickly. With global clean energy investment exceeding 2 trillion last year — over $750 billion of which went to electrified transport — the prize is too big to lose.
So far these policies are working to tip the scales in our industry’s favour. About four-of-five EVs sold in America are now built in North America, and the continent has landed over $100 billion in EV battery investments, supporting 65,000 jobs.
And while Tesla has been profitable for years, GM announced last week that its EVs are now also earning the company more than they cost to make, helped by surging sales that made GM the “fastest-growing high volume EV manufacturer” in the U.S. Like oxygen to fire, the more measures that exist to incentivize EVs, the more that companies like GM will scale up production and improve cost efficiencies — resulting in better, more affordable EVs sooner.
It’s unclear what will happen to the EV and battery plants destined for states like Kentucky and Georgia. Likely, Americans will be spending more at the pump.
But Canada can chart a better course, one that protects our industries and prioritizes cost-savings for Canadians. We’ll eventually meet our historical auto partner at the same final destination — we’ll just have made fewer expensive stops along the way.
This post was co-authored by Joanna Kyriazis and first appeared in the Toronto Star.
