Tesla Seeks Reduced Tariffs on Chinese-Made EVs in Canada

Before Canada announced its decision to impose a 100% tariff on Chinese-made electric vehicles (EVs) starting October 1, Tesla had approached the Canadian government requesting a lower tariff for its cars. This move aligns with Canada's broader trade and tariff policies, influenced by similar actions from the United States.

Tesla seeks EU-level tariffs, Canada imposes 100% tariffs on Chinese electric vehicles

According to a Canadian government source, Tesla requested a tariff rate comparable to what it received from the European Union (EU). The EU had recently imposed a 9% tariff on Tesla vehicles made in China, significantly lower than the 36.3% rate applied to other Chinese EV imports. Tesla’s request to Canada was made prior to the official announcement of the new tariffs.

On August 26, Canada announced it would impose a 100% tariff on all EVs imported from China. This decision was influenced by concerns over China’s state-directed policy of over-capacity in the automotive sector. The duties will affect all Chinese-made vehicles, including those produced by Tesla in Shanghai.

The EU's approach to Tesla's Chinese-made cars is more lenient compared to Canada and the United States. While the EU only considered direct subsidy costs for Tesla, Canada and the U.S. evaluated a broader range of factors, including subsidies, industrial over-capacity, non-market policies, and standards for environmental and labour practices.

Read more: EU Reduces Planned Tariffs on Tesla Vehicles Imported from China to 9%

Tesla Faces Canadian Tariffs on Chinese EVs as U.S. Delays New Import Duties

Tesla has not disclosed the number of Chinese-made vehicles it exports to Canada. However, vehicle-identification codes indicate that models such as the Model 3 and Model Y are shipped from Shanghai to Canada. Since the Canadian tariff announcement, Tesla has not contacted Ottawa again.

In contrast, U.S. President Joe Biden’s administration announced in May a quadrupling of tariffs on Chinese EVs to 100%, along with increased duties on other Chinese goods. Implementation of these U.S. tariffs has been delayed until September, with possible adjustments anticipated.

Volvo Cars and Polestar, other manufacturers with Chinese-made vehicles imported into Canada, are assessing the impact of the new tariffs. Volvo imports models like the EX30 and XC60, while Polestar ships the Polestar 2 from China. Both companies are evaluating how the increased tariffs will affect their operations and pricing strategies.

Read more: Trump Assassination Attempt Upends US Election 2024: Apple and Tesla CEOs Have Spoken

Conclusion

Tesla’s attempt to negotiate lower tariffs with Canada reflects broader challenges faced by the automotive industry as global trade policies shift. With Canada’s new tariffs and ongoing discussions in the U.S. and EU, automakers must navigate a complex and evolving regulatory environment.