Trump’s proposed EV subsidy cuts and tariffs could upend BC’s electric vehicle goals

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.

Related Topics:#CanadaEVSubsidies #ResourceWorks NorthAmericanAutomotiveIndustry TrumpElectricVehicleSubsidies TrumpTariffs

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Automotive

New federal government should pull the plug on Canada’s EV revolution

Published on April 30, 2025

Todayville

From the Fraser Institute

By Kenneth P. Green

During his victory speech Monday night, Prime Minister Mark Carney repeated one of his favourite campaign slogans and vowed to make Canada a “clean energy superpower.” So, Canadians can expect Ottawa to “invest” more taxpayer money in “clean energy” projects including electric vehicles (EVs), the revolutionary transportation technology that’s been ready to replace internal combustion since 1901 yet still requires government subsidies.

It’s a good time for a little historical review. In 2012 south of the border, the Obama administration poured massive subsidies into companies peddling green tech, only to see a vast swath go belly up including Solyndra, would-be maker of advanced solar panels, which failed so spectacularly CNN called the company the “poster child for well-meaning government policy gone bad.”

One might think that such a spectacular failure might have served as a cautionary tale for today’s politicians. But one would be wrong. Even as the EV transition slammed into stiff headwinds, the Trudeau government and Ontario’s Ford government poured $5 billion in subsidies into Honda to build an EV battery plant and manufacture EVs in Ontario. That “investment” came on top of a long list of other “investments” including $15 billion for Stellantis and LG Energy Solution; $13 billion for Volkswagen (or $16.3 billion, per the Parliamentary Budget Officer), a combined $4.24 billion (federal/Quebec split) to Northvolt, a Swedish battery maker, and a combined $644 million (federal/Quebec split) to Ford Motor Company to build a cathode manufacturing plant in Quebec.

How’s all that working out? Not great.

“Projects announced for Canada’s EV supply chain are in various states of operation, and many remain years away from production,” notes automotive/natural resource reporter Gabriel Friedman, writing in the Financial Post. “Of the four multibillion-dollar battery cell manufacturing plants announced for Canada, only one—a joint venture known as NextStar Energy Inc. between South Korea’s LG Energy Solution Ltd. and European automaker Stellantis NV—progressed into even the construction phase.”

In 2023, Volkswagen said it would invest $7 billion by 2030 to build a battery cell manufacturing complex in St. Thomas, Ontario. However, Friedman notes “construction of the VW plant is not scheduled to begin until this spring [2025] and initial cell production will not begin for years.” Or ever, if Donald Trump’s pledge to end U.S. government support for a broad EV transition comes to pass.

In the meantime, other elements of Canada’s “clean tech” future are also in doubt. In December 2024, Saint-Jérome, Que.-based Lion Electric Co., which had received $100 million in provincial and government support to assemble batteries in Canada for electric school buses and trucks, said it would file for bankruptcy in the United States and creditor protection in Canada. And Ford Motor Company last summer scrapped its planned EV assembly plant in Oakville, Ontario—after $640 million in federal and provincial support.

And of course, there’s Canada’s own poster-child-of-clean-tech-subsidy failure, Northvolt. According to the CBC, the Swedish battery manufacturer, with plans to build a $7 billion factory in Quebec, has declared bankruptcy in Sweden, though Northvolt claims that its North American operations are “solvent.” That’s cold comfort to some Quebec policymakers: “We’re going to be losing hundreds of millions of dollars in a bet that our government in Quebec made on a poorly negotiated investment,” said Parti Québécois MNA Pascal Paradis.

Elections often bring about change. If the Carney government wants to change course and avoid more clean-tech calamities, it should pull the plug on the EV revolution and avoid any more electro-boondoggles.

Kenneth P. Green

Senior Fellow, Fraser Institute

Automotive

Major automakers push congress to block California’s 2035 EV mandate

Published on April 28, 2025

Todayville

MxM News

Quick Hit:

Major automakers are urging Congress to intervene and halt California’s aggressive plan to eliminate gasoline-only vehicles by 2035. With the Biden-era EPA waiver empowering California and 11 other states to enforce the rule, automakers warn of immediate impacts on vehicle availability and consumer choice. The U.S. House is preparing for a critical vote to determine if California’s sweeping environmental mandates will stand.

Key Details:

Automakers argue California’s rules will raise prices and limit consumer choices, especially amid high tariffs on auto imports.
The House is set to vote this week on repealing the EPA waiver that greenlit California’s mandate.
California’s regulations would require 35% of 2026 model year vehicles to be zero-emission, a figure manufacturers say is unrealistic.

Diving Deeper:

The Alliance for Automotive Innovation, representing industry giants such as General Motors, Toyota, Volkswagen, and Hyundai, issued a letter Monday warning Congress about the looming consequences of California’s radical environmental regulations. The automakers stressed that unless Congress acts swiftly, vehicle shipments across the country could be disrupted within months, forcing car companies to artificially limit sales of traditional vehicles to meet electric vehicle quotas.

California’s Air Resources Board rules have already spread to 11 other states—including New York, Massachusetts, and Oregon—together representing roughly 40% of the entire U.S. auto market. Despite repeated concerns from manufacturers, California officials have doubled down, insisting that their measures are essential for meeting lofty greenhouse gas reduction targets and combating smog. However, even some states like Maryland have recognized the impracticality of California’s timeline, opting to delay compliance.

A major legal hurdle complicates the path forward. The Government Accountability Office ruled in March that the EPA waiver issued under former President Joe Biden cannot be revoked under the Congressional Review Act, which requires only a simple Senate majority. This creates uncertainty over whether Congress can truly roll back California’s authority without more complex legislative action.

The House is also gearing up to tackle other elements of California’s environmental regime, including blocking the state from imposing stricter pollution standards on commercial trucks and halting its low-nitrogen oxide emissions regulations for heavy-duty vehicles. These moves reflect growing concerns that California’s progressive regulatory overreach is threatening national commerce and consumer choice.

Under California’s current rules, the state demands that 35% of light-duty vehicles for the 2026 model year be zero-emission, scaling up rapidly to 68% by 2030. Industry experts widely agree that these targets are disconnected from reality, given the current slow pace of electric vehicle adoption among the broader American public, particularly in rural and lower-income areas.

California first unveiled its plan in 2020, aiming to make at least 80% of new cars electric and the remainder plug-in hybrids by 2035. Now, under President Donald Trump’s leadership, the U.S. Transportation Department is working to undo the aggressive fuel economy regulations imposed during former President Joe Biden’s term, offering a much-needed course correction for an auto industry burdened by regulatory overreach.

As Congress debates, the larger question remains: Will America allow one state’s left-wing environmental ideology to dictate terms for the entire country’s auto industry?