Will Trump blow up Canada's $50 billion EV industry?

Canada has received more than $50 billion in EV-related investments over the past three years, all in preparation for American demand, Canada's economy is “intensely connected” to the US — but Trump may pose a major challenge to the system.

With president-elect Donald Trump returning to the White House soon, Canada is now facing a mountain of worry about whether, especially in the automotive sector, from tariffs on Canadian-made cars to the collapse of electrification policy, it is changing electricity. in the market completely. And the country could see 60 years of “cross-border car consensus” come to a sad halt, reports Automotive News in an in-depth look at the issue.

“We are very connected. “Part of the cars made in Canada are made by American companies,” said Flavio Volpe, president of the Automotive Parts Manufacturers' Association, told Automotive News. “When he crosses Canada – he pulls it off [United States-Mexico-Canada Agreement]you're putting in a tariff wall – you're hurting General Motors, Ford and then there's Stellantis… You're hurting American parts companies, American suppliers.”

There are many possibilities, including a 10% tariff on global exports to the US, which will cut tens of billions of dollars from Canada's GDP, and those cuts will hurt the auto industry the most, the report said.

Prime Minister Justin Trudeau jumped into action to congratulate Trump after the win, saying the two countries are “very closely linked” economically, and Ottawa is now working to deal with critical border issues.

Trump, who has been eager to downplay EVs, has said he will work quickly to repeal Biden's Tax Cuts Act, which has put billions of dollars into battery supply programs. He also said that cars made in Mexico will be charged a fee of approximately 200%, while cars from China, Europe and other places may receive higher prices.

Of course, billions of dollars in investment in EV manufacturing under the IRA have been happening in red states, like South Carolina, Ohio, and Georgia, so it's unlikely he'll be willing to take away investment and jobs from his key areas. .

After yesterday's election news, US EV makers Tesla, Lucid, and Rivian, as well as EV battery manufacturer, LG have all said they are ready to work with Trump to ensure EV technology continues at full speed – but that will mean or how it will work. it is not yet clear.

Of course, Musk's role in all of this and his reaction to Trump is still to be determined, and that will have a big impact on countries like Canada – “You might see some kind of result where they can't go from there. [EV supports] absolutely because that would make life really difficult for Tesla,” said Brendan Sweeney, executive director of the Trillium Network for Advanced Manufacturing.

Detroit's Big Three – Ford, GM, and Stellanis – all have heavy footholds in Canada, with thousands of unionized auto workers there, so Trump's decisions will not only affect those companies but also dozens of suppliers.

This week, BYD decided to suspend its plans to enter Canada, which may be blocked by the country's 100% tariff on EVs imported from China and the upcoming decisions from the US. The move puts a pin on the plan after months of legal action over the summer, when BYD held a meeting with dealers across Canada to discuss a possible distribution network for the car and spoke to lobbyists about how the federal government could get on board.

Back in August, Prime Minister Justin Trudeau told reporters that the government would follow the US plan to impose strong tariffs on EV imports from China.

Of course, getting precious mineral mines up and running domestically is a priority for Canada, cutting China out of the equation, said Brian Kingston, CEO of the Canadian Vehicle Manufacturers' Association, according to the report. The goal here is to prove that Canada is doing its part to “reduce” China to avoid tariffs, which he said will not be easy, but “we have to show the American people that we are ready to go.”