From Resource Works

Canada’s regime of electric vehicle subsidies is facing a crisis with United States President-elect Donald Trump’s promise to end his own country’s EV incentives. Trump has proposed eliminating the $7,500 USD tax credit for those who purchase EVs, as well as threatening to impose a 25 per cent tariff on Canadian and Mexican imports.

Considering the interconnection of the North American automotive industry, this has the potential to severely disrupt Canada’s ambitious goals for widespread EV adoption. In British Columbia, whose provincial government has fully embraced the EV transition, the consequences of Trump’s presidency will be felt the strongest.

Trump’s pledge to eliminate the subsidies comes from his economic vision of a reduced role for the federal government in the American economy. This does resonate with vast segments of the U.S. market, but how it will impact Canada’s automakers is far less clear-cut.

EV subsidies in Canada, either at the federal or provincial level, are essential for the EV industry’s momentum to be maintained. Rebates of $5,000 are offered federally, and $4,000 under the CleanBC “Go Electric” program.

BC consumers can afford to buy EVs at a higher rate, and that helps sustain sales.

If Trump terminates the subsidies, automakers like General Motors, which are already dealing with slower EV production, will be reluctant to stay the course. The EV supply will fall, causing higher prices.

BC is Canada’s trailblazer in the EV market, accounting for almost 1 in 5 EV registrations across the entire country despite making up less than 14 per cent of the population. Policies like CleanBC have made EVs an attractive, affordable option for middle-class buyers, and the provincial government is committed to building up EV infrastructure.

The provincial government’s interim mandates are designed to align with federal goals, which aim for 10 per cent zero-emission vehicle (ZEV) sales by 2025, 30 per cent by 2030, and then 100 per cent by 2040.

BC’s progress will be derailed by market turbulence triggered by Trump’s proposed policies. The removal of U.S. subsidies will be paired with his threat of 25 per cent tariffs on Canadian imports.

In addition to the likely reduction in EV supply, automakers like GM and Ford, which produce many of the EV models partially made in Canada for export to the American market, will be made more expensive and price Canadian-made EVs out of competition.

In BC, the EV battery plants being built in Ontario and Quebec will be delayed or even cancelled due to the lack of economic viability. Manufacturers will shift back to producing hybrid or gas-powered cars, hampering BC’s EV and ZEV targets.

As a result, BC consumers will be hit hard by the twin blows of inflated EV prices and slashed rebates. Provincial and federal budgets are already stretched, and CleanBC could be on the chopping block for cuts if the North American EV industry stagnates.

Charging infrastructure, another key component of BC’s EV strategy, might also suffer. As manufacturers like Tesla and GM scale back production, investments in public charging stations could decline, perpetuating range anxiety and further slowing EV adoption rates.

Trump should be taken at his word when he says EV subsidies will be slashed and tariffs will be imposed on Canadian markets. For BC, the stakes are even higher, and the choices made by the province’s leaders may determine if the CleanBC regime and the EV program will survive the next few years.

One thing is clear, the North American automarket is more unpredictable than it has ever been since NAFTA, and Canada as a whole does not hold the balance when it comes to leverage.

From the Daily Caller News Foundation

By Ireland Owens

South Korean companies are reconsidering investments into building electric vehicle (EV) battery plants in the United States, according to Bloomberg.

Some South Korean companies have slowed or halted the construction of some U.S. battery plants over concerns about slackening demand for EVs and President-elect Donald Trump’s impending return to the White House, according to Bloomberg. Trump’s proposed cuts to tax credits that have benefitted EV makers are causing some Korean companies to rethink their $54 billion U.S. investment plans.

The price of lithium, a key mineral used in EV batteries, dropped nearly 90% from their highs in 2022 due to slower-than-anticipated EV adoption, Bloomberg reported. Several South Korean companies announced plans for U.S. battery plants in 2022, promising the creation of thousands of jobs, following President Joe Biden’s Inflation Reduction Act being signed into law in August 2022, according to Bloomberg.

South Korea’s supply of batteries and battery materials has increased exponentially over the last few years, according to Aranca, a global research and analytics firm. South Korean-owned gigafactories will account for 43% of U.S. battery production growth over the next five years, according to Benchmark Source. Various Korean companies have been pumping billions of dollars into American manufacturing in recent years, with South Korean companies investing more in the U.S. than any other country in 2023.

Trump has long criticized EVs, and vowed to repeal the Biden administration’s EV measures in October 2023, calling them “insane.” The president-elect’s transition team is planning to undo the $7,500 consumer tax credit for EV purchases, Reuters reported last month.

On the campaign trail, Trump promised to “revolutionize” the U.S. auto industry and vowed to make interest on car loans fully tax deductible in an attempt to boost domestic auto production. Trump has also proposed to offer tax breaks for purchasing vehicles manufactured in the U.S., emphasizing that it would boost domestic auto industry jobs and benefit American automakers, according to CBT News. The president-elect has proposed introducing tariffs on various imported goods, causing some American companies to speed up shifting production out of other countries, such as China and Mexico.

The Biden-Harris administration has led a push to increase the usage of EVs nationwide as part of President Joe Biden’s signature climate agenda. Biden introduced stringent tailpipe emissions  standards in March that would require about 67% of all light-duty vehicles sold after 2032 to be EVs or hybrids. The president also vowed to build 500,000 public EV chargers nationwide by 2030, although the charging network plans has thus far been significantly delayed.