Canada, following the lead of the United States, announced on August 26 that it will apply a 100% tariff on all electric vehicles manufactured in China and sold in the country, in response to what Ottawa sees as intentional overcapacity policies directed by the Chinese government.
The tariffs, which take effect on October 1, will apply to all electric vehicles shipped from China, including those made by billionaire Elon Musk’s Tesla. Ottawa had announced its intention to impose the tariffs in June.
The source, who asked to remain anonymous given the sensitivity of the situation, said Tesla had reached out to the Canadian government before the official announcement. The automaker had asked for a tariff similar to the one applied in the European Union, the source said.
Tesla does not disclose its Chinese exports to Canada. However, vehicle identification codes showed that the Model 3 compact sedan and the Model Y crossover were exported from Shanghai to Canada.
Tesla owner, American billionaire Elon Musk, is also the owner of the social network X, formerly known as Twitter.
The European Union softened its stance on Tesla cars this month when it decided to impose a 9 percent tariff on cars the company made in China, compared with a 36.3 percent rate it applied to other Chinese electric vehicle imports.
While the European Union only considered the direct costs of subsidies when calculating its tariff on Tesla vehicles, the United States and Canada looked at subsidies, industrial overcapacity, non-trade policies, as well as environmental and labor standards, the source said.
Tesla has not communicated with Ottawa since Monday, the source said. The electric car maker was also not immediately available to comment to Reuters.
The office of Finance Minister Chrystia Freeland, who is responsible for tariff policy, declined to comment to Reuters on the talks with Tesla.
Canadian auto imports from China to its largest port, Vancouver, rose 460 per cent year-over-year, reaching 44,356 imported electric vehicles in 2023, as Tesla began shipping its Shanghai-made electric cars to Canada.
In May, US President Joe Biden announced the imposition of tariffs on Chinese electric vehicles of up to 100%, a doubling of tariffs on semiconductors and solar cells to 50%, as well as new 25% tariffs on lithium-ion batteries and other strategic goods.
Tesla has never shipped China-made models to the U.S. market, according to a letter the company sent in July 2023 to the U.S. Environmental Protection Agency.
The implementation of the US tariffs has been postponed until September and there is a possibility that the new tariffs will be reviewed this week.
Volvo said it was studying the effects of the tariff increase in Canada. The Swedish automaker said it imported the EX30, XC60 and a limited number of S90 models from China to Canada, but did not disclose specific figures.
Swedish electric vehicle maker Polestar, partly owned by Volvo and China’s Geely, is shipping the Polestar 2 model from China to Canada. The company said it was looking into the impact of Canadian tariffs.
Fuente: CBC / Reuters
Adaptation: RCI / R. Valencia
