Tesla Seeks Lower Tariffs on Chinese-Made EVs from Canada Before New Duties Take Effect

tesla asked canada for lower tariff on china made evs government source says

Tesla made a bid to Canada for reduced tariffs on its Chinese-made electric vehicles (EVs) prior to the Canadian government’s recent decision to impose a 100% duty on all such imports. According to a Canadian government source, Tesla approached Ottawa requesting a tariff rate comparable to the one it receives in the European Union. The Canadian government, following the U.S.’s lead, announced on Monday that starting October 1, it will levy a 100% tariff on all EVs imported from China, including those from Tesla.

The move is part of Canada’s response to what it describes as China’s state-directed policy of over-capacity in the automotive sector. The decision affects all Chinese-made EVs, and the tariffs will apply to models such as Tesla’s Model 3 and Model Y, which are exported from Shanghai to Canada.

Tesla’s request for a lower tariff comes in light of recent developments in Europe, where the EU imposed a 9% tariff on Tesla vehicles made in China, significantly lower than the 36.3% tariff applied to other Chinese EV imports. The EU’s tariff calculation for Tesla considered only direct subsidies, whereas the U.S. and Canadian tariffs account for a broader range of factors, including industrial over-capacity and non-market policies.

Tesla has not contacted Canadian officials since the tariff announcement, and the company declined to comment on the matter. The office of Canada’s Finance Minister, Chrystia Freeland, also did not provide details on the discussions with Tesla.

Imports of Chinese automobiles to Canada, particularly through the port of Vancouver, surged by 460% in 2023, coinciding with Tesla’s increased shipments of Shanghai-made EVs. Meanwhile, U.S. President Joe Biden’s administration has similarly ramped up tariffs on Chinese EVs, with a 100% tariff set to take effect in September, alongside increased duties on semiconductors, solar cells, and lithium-ion batteries.

Volvo Cars and Swedish EV maker Polestar are also assessing the impact of the new Canadian tariffs on their operations. Volvo, which imports several models from China, and Polestar, which ships the Polestar 2, have yet to release specific details on how the tariffs will affect their business.

As the global automotive industry navigates these new tariffs, the long-term effects on Tesla and other manufacturers will become clearer once the duties are fully implemented.

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