The Canadian Electric Vehicle thread

[whatnext]

The Muskdouche is supposed to be having an online love-in with Trump on Twitter(oops, X) right now. Which Tesla owners are signing on to hang on the gurus pearls of wisdom?

[Wigs]

Originally Posted by Innsertnamehere

American car manufacturers have always struggled with the developing market anyway.

BYD will eventually eat their lunch and very few people other than Truenorth, myself, some others on this forum seem to understand that.

[chowhou]

Originally Posted by Wigs

BYD will eventually eat their lunch and very few people other than Truenorth, myself, some others on this forum seem to understand that.

That's what they said about Huawei/Oppo/Xiaomi vs Apple/Samsung...

[Architype]

Originally Posted by Wigs

BYD will eventually eat their lunch and very few people other than Truenorth, myself, some others on this forum seem to understand that.

Canadian tariffs on Chinese cars are presently at 6%, do you think it should be increased, or just have our lunch eaten? If that's not the solution, then what is? Are the Chinese playing fair?

[Changing City]

Originally Posted by Architype

Canadian tariffs on Chinese cars are presently at 6%, do you think it should be increased, or just have our lunch eaten? If that's not the solution, then what is? Are the Chinese playing fair?

It's possible BYD might ship cars from China, and pay the 6% tariff (or a higher one, as the new EU tariff doesn't seem to have put them off yet, until their Hungarian and Turkish factories start production). They're already examining the logistics of setting up a Canadian dealership network. Initially any increase in the tariff on Chinese built vehicles will impact Tesla, who would have to supply the vehicles sold here from the US.

However, that situation could change quite quickly, as Tesla are building a gigafactory in Mexico, which could supply Canada. So are BYD. SAIC just announced that they will be building a factory and research and development centre in Mexico for their MG EVs, so the likelihood of Chinese branded EVs being sold here is increasing, even if they're not built in China.

[casper]

Originally Posted by Architype

Canadian tariffs on Chinese cars are presently at 6%, do you think it should be increased, or just have our lunch eaten? If that's not the solution, then what is? Are the Chinese playing fair?

PP (and the Conservatives) are floating a policy of matching the US 100% tariff.

While normally I would apply great caution around Conservative policy, I think this is a case where they are looking at doing the correct thing.

The Liberals are still under the illusion that we can trade fairly with China and it is in our interest to develop a more open arrangement with them. They are wrong. Harper trying to develop more open trade deals with China was also wrong.

Originally Posted by Changing City

It's possible BYD might ship cars from China, and pay the 6% tariff (or a higher one, as the new EU tariff doesn't seem to have put them off yet, until their Hungarian and Turkish factories start production). They're already examining the logistics of setting up a Canadian dealership network. Initially any increase in the tariff on Chinese built vehicles will impact Tesla, who would have to supply the vehicles sold here from the US.

Labour costs for a Hungarian or even Turkish car are going to be a fair bit higher than one made in China.

Originally Posted by Changing City

However, that situation could change quite quickly, as Tesla are building a gigafactory in Mexico, which could supply Canada. So are BYD. SAIC just announced that they will be building a factory and research and development centre in Mexico for their MG EVs, so the likelihood of Chinese branded EVs being sold here is increasing, even if they're not built in China.

Tesla is a weird one, they currently are the Apple or the car industry. They charge a premium for their product, it is somewhat closed and uses a much more closed sales model. If they start to manufacture in Mexico is about competing with Ford, GM etc. on cost or keeping the price high and increasing their profit margin? I am not certain.

[Architype]

Originally Posted by casper

PP (and the Conservatives) are floating a policy of matching the US 100% tariff.

While normally I would apply great caution around Conservative policy, I think this is a case where they are looking at doing the correct thing.

The Liberals are still under the illusion that we can trade fairly with China and it is in our interest to develop a more open arrangement with them. They are wrong. Harper trying to develop more open trade deals with China was also wrong.


Labour costs for a Hungarian or even Turkish car are going to be a fair bit higher than one made in China.


Tesla is a weird one, they currently are the Apple or the car industry. They charge a premium for their product, it is somewhat closed and uses a much more closed sales model. If they start to manufacture in Mexico is about competing with Ford, GM etc. on cost or keeping the price high and increasing their profit margin? I am not certain.

I guess there are a number of alternatives. One is the possibility of building cars in the country where you want to sell them, in this case Canada. Mexico is also a good proxy for the greater North American market. On the other hand, if they are going to endure the effects of a high tariff, perhaps they might as well increase the prices of their cars, so they can reap the benefits themselves, in lieu of any tariff having to be applied. The end result with much of this is that it ultimately prevents customers from getting the best deal possible in a global economy. Tesla has had a premier position so far, but it will have to innovate and jostle going forward to keep it's advantage.

[whatnext]

Originally Posted by Wigs

BYD will eventually eat their lunch and very few people other than Truenorth, myself, some others on this forum seem to understand that.

This isn't the 1980s with Ronnie Reagan putting quotas on cars from Japan. China is not a democracy and is not our ally. Indeed with their enthusiastic support of the Dicatator Putin's war on Ukraine they are actively painting themselves as an enemy. No matter who wins the US election in November, they will ensure Chinese EVs are kept out of North America, even if it means coming down hard on Mexico.

[Truenorth00]

Originally Posted by chowhou

That's what they said about Huawei/Oppo/Xiaomi vs Apple/Samsung...

Except that we know it's happening. That's exactly why Musk wants tariffs on Chinese EVs. He's seen marketshare losses elsewhere. And if it's not loss of marketshare, Tesla has had to cut prices (margin compression).

In this situation, BYD is closer to Samsung that Huawei. That's a more apt analogy, since BYD is substantially vertically integrated and their success comes from being a battery company first (core competency necessary to make EVs).

[Truenorth00]

Originally Posted by Architype

Canadian tariffs on Chinese cars are presently at 6%, do you think it should be increased, or just have our lunch eaten? If that's not the solution, then what is? Are the Chinese playing fair?

I think you misunderstand what we're saying. Nobody is suggesting we shouldn't tariff Chinese EVs. Make it 100% Heck, I hope we don't just stop with EVs.

What is a problem is the lack of understanding of what our legacy OEMs being uncompetitive means. Their home markets in North America and Europe can be protected. But that's not what the majority of sales are. In some cases, not even the majority of profit. If they can't compete with Chinese EVs outside their home markets, many of these companies are toast. Their current business structures and debts will bankrupt them if they have to survive just on home markets.

We have to protect them at home. Fine. But we should be absolutely pressuring them to make the necessary investments that can keep them globally competitive.

[Changing City]

Originally Posted by Truenorth00

I think you misunderstand what we're saying. Nobody is suggesting we shouldn't tariff Chinese EVs. Make it 100% Heck, I hope we don't just stop with EVs.

What is a problem is the lack of understanding of what our legacy OEMs being uncompetitive means. Their home markets in North America and Europe can be protected. But that's not what the majority of sales are. In some cases, not even the majority of profit. If they can't compete with Chinese EVs outside their home markets, many of these companies are toast. Their current business structures and debts will bankrupt them if they have to survive just on home markets.

We have to protect them at home. Fine. But we should be absolutely pressuring them to make the necessary investments that can keep them globally competitive.

Recent proof of your statement. "In the most recent quarter ended June 30, GM lost $104 million on its Chinese business, part of a first half loss totaling $210 million. The automaker had hoped to cut production there in the first quarter and return to profitability." [Bloomberg] The company are now closing a factory there, and laying off thousands of workers. GM's Chinese sales peaked at 4 million as recently as 2017, and fell by almost half to 2.1 million last year. This year sales fell another 29% in Q2.

VW are facing a similar collapse in sales in China, according to this Reuters report.

[Truenorth00]

This isn't the interesting bit. Most people who are ignorant will write this off as some kind of Chinese collusion. They'll finally get it when legacies start losing marketshare in markets that are independent of China like Latin America and the Middle East. Too late at that point.

A lot of these legacies are cooked. Politics isn't going to save them from technological change anymore than FUD back in the day saved horse coachbuilders. The rate of battery development and the investment going to charging infrastructure basically assures it.

[Truenorth00]

By the way, there's genuine questions about how much we can keep Chinese EVs out of Canada. After all there's that small matter of a FIPA with China....

[SpongeG]

this article is behind a paywall. But the headline caught my attention.

Why BYD coming to Canada could be 'devastating' for automakers, good for buyers

'An entrant like BYD coming into Canada could be devastating for the composition of our current industry,' says J.D. Power's Robert Karwel
David Kennedy

BYD's entry into Canada might spell relief for buyers looking for affordable electric vehicles, but it could also have dire consequences for...

https://canada.autonews.com/news-ana...d-and-bad-news

[casper]

Originally Posted by Truenorth00

By the way, there's genuine questions about how much we can keep Chinese EVs out of Canada. After all there's that small matter of a FIPA with China....

Yes, that treaty. Signed by Harper, it protects the ability of companies from China to come in to Canada and violate our environmental standards. It was terrible Conservative treaty that we can't get out of for another 20 years. When the time comes it needs to be terminated.

Elizabeth May from the green party was the most vocal against it. She was correct.

[YOWetal]

Originally Posted by Truenorth00

By the way, there's genuine questions about how much we can keep Chinese EVs out of Canada. After all there's that small matter of a FIPA with China....

FIPA would only protest their investment it has no bearing on import duties. If we don’t let them build a battery plant here to avoid the tariffs it’s in the universe of relevance.

[Edmonton_Ian]

Originally Posted by SpongeG

this article is behind a paywall. But the headline caught my attention.

Why BYD coming to Canada could be 'devastating' for automakers, good for buyers

'An entrant like BYD coming into Canada could be devastating for the composition of our current industry,' says J.D. Power's Robert Karwel
David Kennedy

BYD's entry into Canada might spell relief for buyers looking for affordable electric vehicles, but it could also have dire consequences for...

https://canada.autonews.com/news-ana...d-and-bad-news

I personally welcome BYD if only to challenge the existing OEM's into offering genuinely affordable MASS MARKET BEV's... To think we once had access to affordable hatchbacks and sedans 10-15 years ago compared to now is sad and elitist... An entire class of people myself included are currently priced out of the market, pun very nuch intended...

[Truenorth00]

Originally Posted by YOWetal

FIPA would only protest their investment it has no bearing on import duties. If we don’t let them build a battery plant here to avoid the tariffs it’s in the universe of relevance.

How would they be stopped from building plants here? No laws against it. And I'm guessing any attempt to legislate against that would draw a FIPA lawsuit. Likewise, probably difficult to stop them building lots of parts in Mexico and simply shipping up for final assembly.

People keep forgetting what the Americans did to keep Chinese EVs out. The tariffs on imports from China are only half of it. They also have massive subsidies in the IRA to make sure that Chinese EVs made in Mexico are uncompetitive. We don't have those subsidies.

[casper]

Originally Posted by Truenorth00

How would they be stopped from building plants here? No laws against it. And I'm guessing any attempt to legislate against that would draw a FIPA lawsuit. Likewise, probably difficult to stop them building lots of parts in Mexico and simply shipping up for final assembly.

At that point, we probably should not get overworked about it. The differential with a domestic vehicle is going to be less.

Originally Posted by Truenorth00

People keep forgetting what the Americans did to keep Chinese EVs out. The tariffs on imports from China are only half of it. They also have massive subsidies in the IRA to make sure that Chinese EVs made in Mexico are uncompetitive. We don't have those subsidies.

We do its just not broadly offered. The subsidies for the battery plants was Canada matching the US subsidies. Canada is just being more strategic about which projects get the subsidies and in what form.