Electric car news
The Canadian automotive industry is at a crucial turning point. With more than 50 billion dollars investments in the electric vehicle sector over the past three years, the country was banking on growing demand from the United States. However, Donald Trump's return to the White House could upend those plans and jeopardize decades of cross-border collaboration in the auto industry.
Canada-United States economic interdependence put to the test
The Canadian economy is deeply linked to that of its southern neighbor, particularly in the automobile sector. Flavio Volpe, president of the Association of Automotive Parts Manufacturers, highlights this reality:
- Half of the vehicles manufactured in Canada are made by American companies
- A breakdown in trade agreements would affect not only Canadian manufacturers but also American giants like General Motors, Ford and Stellantis
This interdependence places Canada in a delicate position in the face of Trump's potential protectionist policies. A tax of 10% on imports in the United States could cut Canadian GDP by several billion dollars, with a particularly severe impact on the automobile sector.
Challenges for the electric vehicle industry
Trump's return to the presidency raises many concerns about the future of the electric vehicle industry in Canada. His positions on the subject are clear:
- A stated desire to repeal the Inflation Reduction Act, which has stimulated investment in the battery supply chain
- The threat of imposing tariffs of up to 200% on vehicles made in Mexico
- A likely increase in taxes on imports from Europe, China and other countries
These measures could seriously compromise the Canadian strategy focused on exporting electric vehicles to the United States. Canadian and American manufacturers established in Canada would find themselves in a precarious situation, forced to review their investment and production plans.
The influence of Elon Musk: a factor not to be overlooked
A key element in this complex equation is the potential role of Elon Musk and his influence on President Trump. Tesla, Lucid, Rivian and LG, all major players in the electric vehicle sector in the United States, have already expressed their desire to collaborate with the new administration to stay the course on the development of electric technologies.
Brendan Sweeney, managing director of the Trillium Network for Advanced Manufacturing, suggests that Musk's influence could moderate Trump's positions: “It is possible that we will see a moderating effect, as a complete abandonment of support for electric vehicles would make life really difficult for Tesla.”
This influence could have significant implications for countries like Canada, potentially softening some of the more drastic measures being considered by Trump.
Automakers face uncertainty
The major American automakers – Ford, GM and Stellantis – have a significant presence in Canada, employing thousands of unionized workers. Trump's decisions will therefore have an impact not only on these companies but also on the entire chain of spare parts suppliers.
Faced with this uncertainty, some players are already starting to review their strategies. BYD, the Chinese electric automobile giant, recently decided to suspend its expansion plans in Canada. This decision is probably motivated by 100% federal rates on electric vehicles imported from China and by the uncertainty linked to future American decisions.
Canada's strategy for the future
Faced with these challenges, Canada is seeking to strengthen its position in the electric vehicle supply chain. Brian Kingston, CEO of the Canadian Vehicle Manufacturers' Association, emphasizes the importance of developing the mining of critical minerals on Canadian soil. The objective is to reduce dependence on China and demonstrate to the United States Canada's ability to be a reliable partner in the production of electric vehicles.
This strategy aims to position Canada as a key player in the transition to electromobility, despite political turbulence. It involves massive investments in the extraction and processing of minerals essential to the manufacture of batteries, as well as in the training of a skilled workforce.
The future of the electric automobile industry in Canada remains uncertain, but the country seems determined to adapt to new geopolitical and economic realities. Canada's ability to navigate these stormy waters will determine not only the future of its auto industry, but also its place in the 21st century North American economy.
Written by Philippe Moureau
Forty-year-old passionate about electric cars. I am interested in the energy transition and the fight against greenhouse gas emissions. I am a true electric car enthusiast and environmental advocate.
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