Canadian EV customers are delaying buying decisions while they wait for more Chinese EVs to reach their shores, according to a new survey, suggesting widespread awareness of China’s EV dominance is causing EV buyers to ignore Western automakers’ offerings entirely.
The survey was commissioned by Clean Energy Canada, and shows that Canadian interest in EVs is slowly ticking up, with nearly half of them inclined, likely or certain to buy an EV as their next vehicle.
But more interestingly, among potential EV buyers, there’s one big stumbling block: China.
Originally, Canada had the same tariff on Chinese EVs that the USA had, a 100% tariff implemented (unwisely) by President Biden. As trade partners with the US and with a heavily intermeshed auto industry (given Detroit is literally a stone’s throw away from Canada), Canada thought it would be wise to maintain a united front on auto tariffs.
But then, idiocy happened. The squatter in the US White House put tariffs on Canada leading to immediate job losses, and repeatedly threatened its sovereignty. Now, the US’ relationship with Canada is strained, and Canada is looking towards the rest of the world for allies.
At the same time, China saw an opportunity, and decided to put a tariff on Canadian canola. This was a big deal for farmers in the center of the country, and led to the somewhat unexpected effect of the most conservative, oil-loving Canadian provinces lobbying the Canadian government to drop tariffs on Chinese EVs and allow them into the country, in exchange for China dropping canola tariffs.
Now, China and Canada have an agreement which will allow 49,000 Chinese EVs into the country per year, and the first have started to arrive.
But so far, there aren’t actually a ton of Chinese EV models available in Canada yet. Companies are spinning up their distribution networks, but everything is still in progress. Canada is actually nowhere near selling out this year’s 49k quota, with only about 16k Chinese EVs imported total.
Some brands, like Tesla, have already hit their quota allocation, because they already had distribution networks built up. Other brands are lagging. So there aren’t that many models available, and more are expected to hit shores next year.
This has led to a situation where Canadian buyers know that a wave of high-tech, new, reasonably priced EVs are just around the corner (although they are perhaps overestimating how cheap those EVs will be, as prices will be higher in Canada than in China). And where the type of cars they currently have access to in North America are largely from Western brands that have spent this year lobbying against EVs and canceling models. Or, perhaps worse, brands that are associated with the US, which are subject to significantly more negative public opinion in Canada than ever before.
So, Canadian EV buyers don’t want to buy American cars, and know Chinese EVs are coming, and are higher tech and cheaper than European and Japanese EVs.
This all led to the interesting survey result in question. Of the 48% of Canadians surveyed who said they were likely to buy an EV for their next vehicle, 42% said they wanted to “wait for more Chinese EVs to become available.”
So, these are Canadians who already want an EV, and are ready to buy one – at least the next time they buy a car. But instead of getting one, at a time when gas prices are at historic highs (due to, uh, the same aforementioned idiocy), they’re waiting until they see more Chinese cars.
This is a massive condemnation of everything the West has to offer in the electric space right now. In the past, it was thought that Western buyers might be skeptical of Chinese brands, thinking them to be lower quality, as has been the stereotype in the West for a long time.
But now, that dynamic has flipped on its head – Canadians are refusing the options available to them now, and waiting for Chinese options to become available, expecting them to be superior than the traditional options that have been available to them.
And given that it’s taking time for Chinese brands to establish their networks and ship cars Canada, that means a lot of Canadian buyers are twiddling their thumbs right now.
It’s an interesting situation, given most other countries already have access to Chinese EVs, and they’re selling well in those countries. And it perhaps offers us a view to what might happen to the US auto industry, if there’s ever a sniff that Chinese EVs might come here (which, inevitably, in the long term, I am sure they will).
With US automakers so far behind on electrification, and constantly lobbying to fall even further behind, it doesn’t feel like the gap is going to get any smaller. Eventually, Americans will see that the rest of the world, including their two closest neighbors, are getting access to cheap, efficient EVs that don’t give them the anxiety of supporting the most evil industry in the history of the world to fuel. Eventually, they’ll get tired of spending so much for so little, when everyone else gets great cars for cheap.
There are a few moves within American automakers to try to compete, but it remains to be seen if that’s too little or too late. China has released literally thousands of new EV models, with cutthroat competition driving prices down and quality up.
We do not see that sort of competition happening in the US, especially after republicans sent so many EV jobs to China. And being given the safety blanket of tariffs won’t encourage harsher competition, it will just lull automakers into a false sense of security. The only way to catch a moving target that’s in front of you is to move faster than them, and US automakers simply are not doing that right now.
But US consumers will figure it out eventually. And Canada’s EV buyers are a signal of what’s to come.
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