A trade war with China over EVs could slow Canada's low-carbon transition, groups warn

Environmental groups are calling on the federal government to avoid getting into a trade war with China over electric vehicles.

They say they fear trade sanctions could make EVs more expensive, delaying Canada's transition to a low-carbon economy.

Less than a week after the federal government announced it was considering imposing trade restrictions on cheaper Chinese-made EVs, groups like Environmental Defence are urging Ottawa to consider the ramifications of such a move.

Nate Wallace, Environmental Defence's clean transportation program manager, said Ottawa should take a balanced approach to applying tariffs to Chinese-made EVs.

He said that approach should protect Canadian auto sector jobs while also allowing for the competition that can drive down the price of electric vehicles.

Wallace said North American automakers are bent on making expensive plug-in vehicles that only wealthy households can afford.

«To meet our climate goals, we can't let automakers keep EVs to a niche luxury market so they can keep selling gas guzzlers instead,» Wallace said.

«I think that the danger is… that if [tariffs] enable automakers to slow down the transition to electric vehicles. Our EV industry becomes weaker, not stronger.»

Canada's auto sector faces a number of challenges in the coming years. In a decade, many will need to retool their supply chains and operations to sell electric vehicles in accordance with the federal government's new 2035 EV sales mandate.

The sector is competing with China, the world's largest EV producer. Chinese automakers can build cheaper and more technologically advanced EVs. Industry leader BYD's cheapest EV, the compact Seagull, sells for about $13,000.

The 2023 Chevrolet Bolt retails for more than $38,000.

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