The CEO of General Motors Canada welcomed the possibility of imposing tariffs on imports of Chinese electric vehicles, while BYD, the main producer, looks to enter the Canadian market.

Christian Aquilina, President of General Motors Canada, said: "We are encouraged by the government’s study of these issues."

"Because strong competition and a level playing field encourage us to invest heavily and hire more workers."

The federal government concluded a 30-day consultation last week on whether to follow the U.S. and EU in imposing hefty tariffs to counter the volume of production coming from China.

In announcing the consultations, the federal government stated that the Canadian auto sector faces "unfair competition" from China's state-led policies aimed at overcapacity and a wide range of non-market policies and practices.

Without directly naming Chinese producers, Aquilina pointed to similar concerns.

He said, "The unfair playing field can be extremely damaging, and it is right for the government to consider these issues and look at all the facts."

He deferred to the Canadian Vehicle Manufacturers Association for more specific comments on tariffs. The group has strongly pushed for alignment with U.S. policy so that the more than $40 billion in investments in the Canadian electric vehicle industry announced over the past four years can succeed.

President Brian Kingston stated: "This transition is happening, but it takes time, and we need to ensure that there is enough support to allow these investments and these new facilities to operate."

Kingston said that aligning with the U.S. would also send the right signals ahead of the North American trade talks scheduled for 2026.

“Now is the time. Let’s implement these policies and show the American people that we will stand shoulder to shoulder with them in this approach to China.”

Groups like Unifor, Global Automakers of Canada, and the Canadian Chamber of Commerce have expressed their support, while climate-focused associations such as Clean Energy Canada have responded to concerns that this move might cut off more affordable options for electric vehicles.

The potential tariffs could be significant. In May, the U.S. raised its tariffs to 100 percent from 25 percent, while the European Union set potential tariffs of up to 38 percent.

Currently, the only Chinese electric vehicles imported into Canada are from the American tech giant Tesla, which are manufactured at the company’s Shanghai plant and subject to a 6 percent tariff.

However, there is potential for Chinese BYD, the world's largest electric vehicle manufacturer by volume, to come to Canada.

Records from lobby groups on July 24 showed that the company hired a consultant to advise on "issues related to BYD's expected entry into the Canadian market" and the imposition of tariffs on electric vehicles.

BYD, which ceased production of gasoline models only in 2022, sold more than three million vehicles last year. The company launched its Seagull EV last year at a starting price of about $14,600 for a version with a range of 305 kilometers.

Meanwhile, General Motors halted production of the base Chevy Bolt EV last year, only to clarify that it plans to relaunch the model later.

Aquilina mentioned that the timing for the return of the Bolt and its potential pricing has yet to be determined, but the company aims to bring it back in late next year.

For now, the company is focused on launching its new Chevrolet Equinox electric vehicle, which retails for around $50,000, which he said places General Motors at the forefront of the cheapest electric vehicles in Canada with a range of about 500 kilometers.

While the price range is still out of reach for many, it also reflects the rising prices of vehicles in general.

The average price of a new car in Canada was about $68,000 in June, up from $55,000 two years ago, according to AutoTrader. Meanwhile, Canadian Black Book states that the average price of an electric vehicle exceeded $73,000 last year.

The rise in electric vehicle prices accompanies producers manufacturing larger vehicles with larger batteries, resulting in increased range (and potential profits), but General Motors says it sees customer appetite to forgo some of that range.

Aquilina stated, "Initially, when range anxiety was at its peak, this became the thing that customers wanted more than anything else."

"What the Bolt proved... is that customers are willing to make this trade-off between range and price because, of course, there is a relationship and that really encouraged us to reintroduce the Bolt."

The discussion around pricing and tariffs comes as electric vehicle sales decline and producers temper expectations and ambitions about the transition.

In late July, Umicore announced that it had suspended spending on a $2.76 billion battery materials plant in Eastern Ontario, citing significantly reduced growth forecasts for the electric vehicle market.

In April, Ford delayed its planned electric vehicle production at its Oakville, Ontario plant by two years, only to announce in June that it would shift its production plans away from electric vehicles toward Super Duty pickup trucks.

Meanwhile, zero-emissions vehicles, including pure and plug-in hybrid batteries, accounted for 11.3 percent of all vehicle registrations in the first quarter, down from 12 percent in the previous quarter, according to Statistics Canada, while growth in the U.S. is slowing further.

Despite the slight decline, battery electric vehicle registrations remained high with a 57 percent increase in the first four months of 2024 compared to last year, while registrations of plug-in hybrid vehicles rose by over 75 percent, according to S&P Global Mobility.

Aquilina stated that the gains and setbacks show that the transition will not be a straight line.

"General Motors has learned the need for flexibility and adaptability, as change is something that will have ups and downs."