Canada’s EV subsidies are wracking up billions in losses for taxpayers, and not just in the auto industry

Dan McTeague

Published

3 hours ago

6 minute read

To anyone who thought that the Liberals’ decision to postpone enforcement of their Electric Vehicle (EV) mandate by one year was part of a well-thought-out plan to get that disastrous program back on track, well, every day brings with it news that you were wrong. In fact, the whole project seems to be coming apart at the seams.

Here’s the latest crisis Mark Carney and his carnival of ideologues are having to deal with. Late last year, the Liberal party instituted a 100% tariff on Chinese-made EVs. The idea was to protect the Canadian EV industry from China dumping their vehicles into our country, at prices far lower than Canadian companies can afford due to their massive state subsidies. This has been a major problem in the EU, which is also attempting to force a transition to EVs.

But Beijing wasn’t going to take that lying down. Taking advantage of Western environmentalist sentiment is an important part of their economic plans — see, for instance, how they’ve cornered the global solar panel market, though the factories making them are powered by massive amounts of coal. So they retaliated with a 75% duty on Canadian canola seed and a 100% tariff on canola oil and canola meal.

This was big enough to really hurt Canadian farmers, and Ottawa was forced to respond with more than $300 million in new relief programs for canola producers. Even so, our farmers have warned that short-term relief from the government will do little if the tariffs are here for the long-term.

With pressure on Carney mounting, his Industry Minister Melanie Joly announced that the government was “looking at” dropping tariffs on Chinese EVs in the hope that China would ease off on their canola tariffs.

That may be good news for canola producers, but how about the automotive companies? They’ve grown increasingly unhappy with the EV mandate, as Canadian consumers have been slow to embrace them, and they’ve been confronted with the prospect of paying significant fines unless they raise prices on the gas-and-diesel driven vehicles which consumers actually want to make the EVs that they don’t really want more attractive.

That’s the context for Brian Kingston, CEO of the Canadian Vehicle Manufacturers’ Association, saying that dropping these tariffs “would be a disaster.”

“China has engaged in state-supported industrial policy to create massive overcapacity in EV production, and that plan is coming to fruition now,” Kingston said. “When you combine that with weak labour and environmental standards, Chinese manufacturers are not competing with Canadian, American, or Mexican manufacturers on a level playing field. We simply cannot allow those vehicles to be dumped into the Canadian market.”

The auto manufacturers Kingston represents are understandably upset about suddenly having to compete with underpriced Chinese EVs. After all, with the government forcing everyone to buy a product they really don’t want, are most people going to patriotically pay more for that product, or will they just grab whichever one is cheaper? I know which one I think is more likely.

And then there’s a related problem — the federal and provincial governments have “invested” somewhere in the neighborhood of $52.5 billion to make Canada a cog in the global EV supply chain. In response to Joly’s announcement, Ontario Premier Doug Ford, who has gone “all in” on EVs, wrote an open letter to the prime minister saying that canceling the tariffs would mean losing out on that “investment,” and put 157,000 Canadian automotive jobs at risk.

Now, it’s worth noting that automakers all over Ontario have already been cutting jobs while scaling back their EV pledges. So even with the tariffs, this “investment” hasn’t been paying out particularly well. Keeping them in place just to save Doug Ford’s bacon seems like the worst of all options.

But it seems to me that the key to untangling this whole mess has been the option I’ve been advocating from the beginning: repeal the EV mandate. That makes Canada less of a mark for China. It benefits the taxpayers by not incentivizing our provincial and federal governments to throw good money after bad, attempting to subsidize companies to protect a shrinking number of EV manufacturing jobs.

The heart of this trade war is an entirely artificial demand for EVs. Removing the mandate from the equation would lower the stakes.

In the end, the best policy is to trust Canadians to make their own decisions. Let the market decide.

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An 18 year veteran of the House of Commons, Dan is widely known in both official languages for his tireless work on energy pricing and saving Canadians money through accurate price forecasts. His Parliamentary initiatives, aimed at helping Canadians cope with affordable energy costs, led to providing Canadians heating fuel rebates on at least two occasions. Widely sought for his extensive work and knowledge in energy pricing, Dan continues to provide valuable insights to North American media and policy makers. He brings three decades of experience and proven efforts on behalf of consumers in both the private and public spheres. Dan is committed to improving energy affordability for Canadians and promoting the benefits we all share in having a strong and robust energy sector.

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Automotive

America’s Troubled EV Industry Loses Its Subsidized Advantage – Now What?

Published on October 1, 2025

Todayville

From the Daily Caller News Foundation

By David Blackmon

The Environmental Protection Agency announced Monday that it has assumed responsibility for what it says is the “Largest Lithium-Ion Battery Cleanup in Agency History” at the Moss Landing facility outside San Francisco.

Crews supervised by the EPA entered the facility this week to begin cleaning out the remains of the fire damaged batteries, which the agency says will be recycled at EPA-approved recycling facilities.

As has happened far too frequently, the retired batteries erupted spontaneously in January, leading authors of MIT’s weekly climate newsletter to speculate about what this latest conflagration would mean for the future of the electric vehicle and stationary battery storage industries going forward.

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“With the growing number of electric vehicles and batteries for energy storage on the grid,” the authors wrote, “more high-profile fires have hit the news, like last year’s truck fire in LA, the spate of e-bike battery fires in New York City, or one at a French recycling plant last year.”

The parade of troubling incidents related to these batteries has continued throughout 2025. In June, for example, a large container ship called the Morning Midas, operated by Zodiac Maritime, sank into the Pacific Ocean after batteries in EVs it was carrying to Alaska spontaneously combusted, forcing the crew to abandon ship. A month later, U.S.-based shipper Matson announced it would no longer transport EV cargoes due to the obvious dangers involved. Three weeks later, Alaska Marine Lines put a similar policy in place.

All of these inconvenient news stories come at an already troubling time for the U.S. EV industry, given that its huge $7,500 per car federal subsidy expired at midnight, Sept. 30. That subsidy was enacted in the Orwellian-named Inflation Reduction Act of 2022 and subsequently repealed in the One Big Beautiful Bill Act signed into law by President Donald Trump on July 4 of this year.

Sales have spiked in the run-up to the subsidy expiration, to no one’s real surprise. But EV makers now face the troubling prospect of having to compete in the U.S. market absent that significant price advantage, leading many to anticipate a significant drop-off in sales.

Some carmakers have already begun to scale back operations. Stellantis announced the cancellation of a planned all-electric Dodge Ram pickup model on Sept.12, citing slowing demand for such trucks in a field already dominated by the Ford F-150 Lightning and the Tesla Cyber Truck. The fact that sales of those competing models are already coming in well below projections this year was another obvious motivating factor.

Ford, meanwhile, said in August it would delay the introduction of what it refers to as “next generation” updates to its Lightning pickup and full-sized electric van for two years due to the same challenging market conditions. “F-150 Lightning, America’s best-selling electric truck, and E-Transit continue to meet today’s customer needs,” the company said in what can only be described as an understatement.

Competitor GM announced it would take similar action on Sept. 4, saying it was suspending production of a pair of Cadillac SUVs – the mid-size Lyriq and the full-size Vistiq – at its assembly plant in Spring Hill, Tenn., effective in December. The company also said it would indefinitely delay the start of a second shift at an assembly plant near Kansas City.

Amid the frequent big fire events involving EV batteries and the industry’s fallout from the loss of a federal subsidy, it must be repeated here that the electric vehicle industry is not “new” or even a young one. It is in fact well over a century old, with the first electric cars introduced in the U.S. in the 1890s, during the same period when gas-powered cars started to come onto the market. In those early years, in fact, many experts insisted that electric cars would ultimately render gas-powered cars obsolete and become the dominant force in American transportation.

But makers of EVs then found themselves suffering from the same set of limitations that plague the industry well over a century later: Range anxiety, lack of infrastructure, and persistent unreliability.

The fact that an industry this old has still not solved for the same set of issues after so much time makes it reasonable to question whether it ever will.

David Blackmon is an energy writer and consultant based in Texas. He spent 40 years in the oil and gas business, where he specialized in public policy and communications.

Automotive

Michigan could be a winner as companies pull back from EVs

Published on September 16, 2025

Todayville

From The Center Square

By Elyse S. Apel

Federal deregulation and tax credit cuts are reshaping the auto industry, as Ford Motor Co. and General Motors Co. scale back electric vehicle production and redirect billions into hybrids and traditional gas-powered cars.

Yet, the Michigan automotive industry could see increased investments from those same companies as they reallocate that funding.

While both Ford and GM previously announced ambitious targets to expand electric vehicle fleets over the next decade, they are now cutting back on electric vehicle production.

That comes in response to federal deregulation of gas-powered vehicles, tax credit cuts, and the prospect of slowing consumer demand.

In August, Ford stated it was canceling plans to build a new electric three-row SUV. Instead, it is turning its focus to hybrid vehicles, including a massive $5 billon investment into a new “affordable” hybrid truck.

GM announced similar plans earlier this month. It will be cutting back electric vehicle production at Kansas and Tennessee plants, anticipating a decline in demand once federal tax credits end Sept. 30.

This all could have a real impact on the electric vehicle industry across the nation and experts are already anticipating that.

A new forecast by Ernst & Young Global Limited now predicts a five-year delay in electric vehicles making up 50% of the new car marketshare. While previous forecasts predicted America would reach that mark by 2034, the new forecast pushed that back to 2039.

“The U.S. faces policy uncertainty, high costs, and infrastructure gaps,” said Constantin M. Gall, the company’s global aerospace defense and mobility leader.

Clean energy advocacy groups are decrying this move away from electric vehicle initiatives, largely blaming the Trump administration.

“The transition to electric vehicles now faces significant roadblocks,” said Ecology Center in an April report. “The Trump administration has rolled back key policies supporting clean transportation.”

It also pointed to a nationwide deregulation of the gas-powered vehicle industry for allowing those to remain “dominant” over electric vehicles.

“These actions prioritize fossil fuels over clean energy, threatening progress toward a sustainable transportation future,” the report stated.

While bad news for electric vehicle supporters, the Michigan automotive industry could be a winner as companies re-shift focus back to gas-powered and hybrid vehicles.

With billions of dollars previously allocated to federal pollution fines and electric vehicle costs now available for investment, GM now plans to increase production at a Detroit-area plant by 2027.

The Michigan-based company also recently announced plans to invest billions into another Michigan plant in Lake Orion Township.

For similar reasons, Ford’s CEO Jim Farley told analysts that the company anticipates monetary savings “has the potential to unlock a multibillion-dollar opportunity over the next two years.”

While Gov. Gretchen Whitmer has long been a proponent for the electric vehicle industry, she did recently emphasize her support for all Michigan-based manufacturing, no matter the type.

“We don’t care what you drive – gas, diesel, hybrid, or electric – as long as it’s made in Michigan,” she said following the GM Orion announcement. “Together, let’s keep bringing manufacturing home, growing the middle class, and making more stuff in Michigan.”

Elyse Apel is a reporter for The Center Square covering Colorado and Michigan. A graduate of Hillsdale College, Elyse’s writing has been published in a wide variety of national publications from the Washington Examiner to The American Spectator and The Daily Wire.