Tesla seeks lower tariffs from Canada amid 100% duty on Chinese EVs

Lately, Tesla sought lower tariffs for its made-in-China EVs to the Canadian authorities before Ottawa imposed a new 100% duty on such imports. The action is consistent with the recent action by Canada, which is followed by a similar action by the United States.

On Monday of the same week, Canada announced that all electric vehicles made in China will attract a 100% tariff starting from October 1. This due to what the West feels is China’s state-directed policies leading to over-capacity especially in the EV market affects all Tesla models including the Model 3. The Canadian government had earlier informed that it will levy these duties in June this year.

An unnamed government official revealed that Tesla go to the Canadians keen to be given a tariff rate similar to that of the European Union where it enjoys a meager 9 percent tariff rate on its Chinese made cars. The EU applied the different tariff rates based solely on the direct subsidisation cost, not as in the cases of Canada and the US where other reasons include industrial over-capacities and non-market policies hurdles.

As for Tesla’s Chinese exports, there are records of its Model 3 and Model Y vehicles being exported from Shanghai to Canada but it has not announced any specific figures. Since the declaration of the new tariff policy, there has not been any communication with Ottawa as requested by Tesla.

When asked about Tesla’s request, the office of the Canadian Finance Minister, which is in charge of tariff rules, remained silent. On the same note, Canada’s automotive imports from China increased to 460% from the prior year of 2023 due in part to Tesla Inc’s shipments.

In the US, President Joe Biden has also recently stated that he will quadruple tariffs on Chinese EVs, setting duties at 100 percent alongside other equally high levels on related products. These tariffs in the US have been rescheduled for September while possible alterations continue to be worked on.

Volvo Cars and Polestar, another Swedish EV maker partly owned by Volvo and China’s Geely, are reviewing the impact of Canada’s new tariffs on their operations.