Canada automotive industry

Ottawa axes EV mandate, relaunches rebates program with new auto strategy
(iPolitics) The federal government announced a suite of new electric vehicle policies Thursday, including the reintroduction of the popular rebate program and the elimination of the EV sales mandate in favour of new emission standards.
Speaking at an auto parts manufacturer in Woodbridge, Ont., Prime Minister Mark Carney said Ottawa is restoring the rebate program with $2.3 billion to help Canadians cover the cost of a new EV, and $1.5 billion for EV infrastructure like charging stations.
Government officials at a technical briefing Thursday were unable to say exactly what impact these new measures will have on Canada’s overall emissions, and promised to publish modelling in the months to come.
Ottawa’s target is to have a 75 per cent EV adoption rate by 2035 and a 90 per cent rate by 2040. The sales mandate Carney is eliminating would have required that 100 per cent of new passenger vehicle sales be electric by 2035.
Ottawa will offer $5,000 toward the cost of a new EV and $2,500 toward plug-in hybrids. Those rebates will decrease every year until they’re phased out after 2030 — or until the money for the program runs out.
The rebates will only apply to vehicles costing less than $50,000 and imported from a country with a free-trade agreement with Canada — meaning the Chinese EVs Ottawa is allowing into the country won’t be eligible for the rebates.
Canadian-made EVs, which right now include only the Dodge Charger and the Chrysler Pacifica, are exempt from the $50,000 cap.
The policy choice drew praise from Flavio Volpe, who said Ottawa is finally using the size of the Canadian market itself as a lever.
Premier Doug Ford welcomed Ottawa’s new national auto strategy as a necessary response to U.S. President Donald Trump’s tariff threats

2 February
Federal automotive strategy needs to reward Canadian production: report
(Canadian Press via BNNBloomberg) As the profile of Canada’s automotive sector shifts dramatically, a new report is pushing the federal government to reward automotive companies that are committed to the country.
The report from the Trillium Network for Advanced Manufacturing notes that the last decade has seen U.S. automakers significantly shrink their Canadian footprint, while Japanese companies have kept production and employment steady.
The diverging trends mean Toyota and Honda accounted for 62 per cent of assembly plant employment in Canada at the end of 2024, up from 40 per cent in 2015. The two Japanese automakers also produced 77 per cent of the vehicles assembled in Canada in 2025, up from 44 per cent a decade ago.
While some of the change is from factors like Ford working to retool its Oakville, Ont., assembly plant, the Detroit-based automaker did also push back EV production slated there for 2025 by two years, only to change plans again and is now working to start production of gasoline-powered pickup trucks later this year.
Trillium says the frequent idling and underuse of U.S. plants have also pushed down productivity in the sector and led to often prolonged layoffs, while Japan-based automakers are leading the way on productivity. With Ottawa set to release its automotive strategy this month, the group says it should reward and incentivize companies that have consistently invested and grown their Canadian footprint, and encourage the use of Canadian-made production technologies in plants.
Japanese carmakers retain Canadian footprint as U.S. scales back Ontario operations
A decade of upheaval and declining production in the Canadian automaking sector has highlighted the persistent strength of Japanese manufacturers in this country, even as the Detroit Three have retreated.
Those are the findings of a new report from the Trillium Network for Advanced Manufacturing, a think tank based at Western University in London, Ont.

21 January
As Trump talks tariffs, his Argentine ally welcomes a first shipload of Chinese EVs
(AP) — The vast field of over 5,800 electric and hybrid vehicles gleamed on the cargo deck of the BYD Changzhou, an Chinese container vessel unloading Wednesday at a river port in eastern Argentina.
Dr. Peter Frise comments: Interesting – and I am not minimizing the effects of this on Argentina or on Canada – BUT…..
As stated in the article, China’s market has been closed for decades, and so there is a huge unfilled gap between vehicle supply and vehicle demand
The government set a price limit of $16K on Chinese vehicles – but I doubt there are any restrictions on either crash or fire safety – so those vehicles would likely be ineligible for importation into Canada
Also, as stated in the article, there is no dealer or parts distribution network, and so, at least for a while, new owners are unsupported by the brand.
In other southern hemisphere countries where Chinese vehicles have come in, it has been found that their durability is poor, and with no parts supply, many vehicles are off the road within a fairly short time.
So the importation of Chinese vehicles into Canada is unlikely to be quite as good as some people predict, or as bad as many fear.

17 January
Foreign automakers who build vehicles in Canada will get preferential market access, official says
Under Ottawa’s new auto policy, foreign companies that make cars in Canada will have more favourable access to the Canadian market than those that choose to import cars assembled outside the country, the official said.
Greig Mordue, an associate professor of engineering at McMaster University, said the policy appears to be aimed at attracting investment from Chinese and other foreign automakers, repeating tactics used in the 1980s that enticed Japanese manufacturers to establish assembly plants in Ontario.
The first step in a new approach to auto policy came Friday when Prime Minister Mark Carney struck a deal with China to cut Canadian tariffs on Chinese-made electric vehicles. …
Mr. Carney said Canada expects the deal with China will lead within three years to Chinese investment in this country’s auto sector. Industry Minister Mélanie Joly was one of four cabinet ministers who accompanied Mr. Carney to China last week, and during the visit, she met with Chinese EV automakers BYD and Chery, her office said.
Chinese EVs will have to meet Canadian safety standards before entering market: auto consultant
Chinese EVs will have to meet Canadian safety standards before entering market: auto consultant
Auto industry consultant Stephan Beatty says the 49,000 Chinese EVs will not immediately enter the Canadian market, citing the need to follow safety standards.

16 January
Dr. Peter Frise: The Myth of the All-American Car
(Maclean’s) While touring the Ford River Rouge plant in Dearborn, Michigan, on Tuesday, President Trump declared that the United States will be just fine making its own automobiles, thank you very much. “We don’t need cars made in Canada, we don’t need cars made in Mexico, we want to make them here,” he said.
… I couldn’t disagree more. Trump’s statements reveal a lack of understanding of how the auto industry works. From extraction and refining of raw materials to the car showroom, Canada—alongside many other nations—plays an essential role in the U.S. auto industry. In fact, America’s industry would collapse without contributions from other countries.
Let’s start with the building blocks. Aluminum is one of the most important materials used in modern cars. Take America’s favourite vehicle, the Ford F-150, whose body is made entirely out of aluminum. Right now, Canada supplies the U.S. with more than half of its aluminum—largely because we have the abundant hydroelectric power needed to run energy-hungry aluminum smelters….

Canada, China slash EV, canola tariffs in reset of ties
Canada to allow Chinese EV imports at 6.1% tariff, Carney says
Says Canada expects China to lower canola tariff
Canada welcomes further Chinese investment
(Reuters) – Canada and China struck an initial trade deal on Friday that will slash tariffs on electric vehicles and canola, as both nations promised to tear down trade barriers while forging new strategic ties during Prime Minister Mark Carney’s visit.
Canada will initially allow in up to 49,000 Chinese electric vehicles at a tariff of 6.1% on most-favoured-nation terms, Carney said after talks with Chinese leaders including President Xi Jinping.
That compares with the 100% tariff on Chinese electric vehicles imposed under former Prime Minister Justin Trudeau in 2024, following similar U.S. penalties. In 2023, China exported 41,678 EVs to Canada.
“This is a return to levels prior to recent trade frictions, but under an agreement that promises much more for Canadians,” Carney told reporters. He later said the quota would gradually increase, reaching about 70,000 vehicles in five years.
“For Canada to build its own competitive EV sector, we will need to learn from innovative partners, access their supply chains, and increase local demand,” Carney said, turning away from Trudeau’s rationale that tariffs were needed to protect domestic producers against subsidised Chinese manufacturers.

16 January
Canada to allow Chinese EVs to trickle in while China reduces canola tariffs
On Thursday in Beijing, Carney ushered in a ‘new era’ in the Sino-Canadian relationship
(National Post) Certain Canadian canola products, seafoods and even Canadians will soon flow faster to China, while Chinese electric vehicles will begin trickling into Canada virtually tariff-free, Prime Minister Mark Carney announced hours after meeting Chinese President Xi Jinping.
Speaking to media from a park in Beijing’s commercial district, Carney announced the details of a new “landmark trade arrangement” with China that saw both countries drop certain recent trade barriers.
The ultimate goal of the deal is for Canada to increase its exports to China — already its second largest trade partner behind the U.S. — by 50 per cent by 2030, Carney said.
The essence of Friday’s deal is that China is expected to reduce crippling tariffs on certain Canadian canola imports in exchange for Canada allowing a small but growing number of Chinese electric vehicles to enter its market at a preferential tariff rate.
The prime minister said Xi also agreed to allow Canadians to enter China visa-free, a change that should happen “soon” according to the Prime Minister’s Office.
Carney said Xi is further expected to drop crippling tariffs on Canola seed of roughly 85 per cent (including a nine per cent base line tariff on all seed imports) to 15 per cent as of March. The tariffs were imposed as part of an anti-dumping investigation by the Chinese government in August.
Trump reverses course, supports Canada-China trade deal
(CTV) “Well, it’s OK. That’s what he should be doing,” Trump told reporters Friday at the White House. “If you can get a deal with China, you should do that.”
Earlier in the day, Trump’s own administration shared conflicting messaging regarding the deal, saying Canada may regret the decision. …
The deal reopens access to one of Canada’s most important export markets, with China ranking as the second-largest buyer of Canadian canola after the U.S., and the world’s largest market for peas.

Motor Mouth: Carney trades Canada’s auto industry for Chinese EVs
Forced to choose between two terrible trading partners, our country’s Prime Minister just made the wrong choice;

2025

5 July
Is it time for a Canadian car company? Profile with Michael Serapio w/Flavio Volpe
CPAC’s Michael Serapio interviews Flavio Volpe, president of the Automotive Parts Manufacturers’ Association (APMA) about the idea of a fully Canadian car—designed and built by a Canadian automaker—and how that would benefit the country and its auto sector.
Ever since becoming prime minister, Mark Carney has talked about fasttracking and building projects of national significance.
Projects that can buttress the Canadian economy in challenging times, but also create prosperity for Canadians now and for generations to follow. That certainly applies to the prime
minister’s goal of making Canada an energy superpower. But for Flavio Volpe, it also means cars. A Canadian-built car made with Canadian parts and owned by a Canadian car company.
Volpe is the president of the automotive parts manufacturers association and recently I spoke with him about why cars and vehicles should be considered projects of national significance.
… Flavio Volpe, thank you for joining us.
So, you know, here we have the prime minister floating this idea of nation building projects. And I think you know arguably when people hear that term they think of things like
pipelines, energy corridors, transportation corridors, defense industries. But here you are raising the idea of a Canadian-made car owned by a Canadian-made company. Why would that be
of benefit to Canada? …

1 July
USITC Releases Second Report on the Economic Impact and Operation of the USMCA Automotive Rules of Origin
The U.S. International Trade Commission (Commission or USITC) today released its second report on the economic impact on the United States of the United States-Mexico-Canada Agreement (USMCA) automotive rules of origin (ROOs), their operation and effects on the U.S. economy and U.S. competitiveness, and whether the rules remain relevant in light of technological changes in the United States.
… Since the USMCA took effect on July 1, 2020, the U.S. market share for vehicle sales and parts consumption in the United States remained relatively unchanged. However, other factors show signs of changes in competitiveness; U.S. motor vehicle production has increased since 2020, but still falls short of 2019 levels. Conversely, U.S. parts production also increased, especially for certain core parts, and exceeds 2019 levels. In both cases, these changes are at least partially attributable to the ROOs, according to Commission modeling.
There were mixed signs of changes in U.S. competitiveness in other USMCA countries since the USMCA entered into force. There is little change in U.S. vehicle market share in Canada and Mexico. Meanwhile, the import share of U.S. parts has increased in Canada but decreased in Mexico. In non-USMCA markets, the U.S. share of light vehicle exported to those markets remained relatively unchanged from 2019 to 2024.
Other individual factors­­—the Inflation Reduction Act, labor strikes, macroeconomic conditions, and more—had a greater impact on the U.S. automotive industry. Nonetheless, no single factor was more impactful than the ROOs.

28 June
“Maple Motors” vehicle
Dr. Peter Frise comments on exchange among Wednesday Nighters
Remember that any new product will need to compete and capture sales from the more than 300 models that are already in the market with established reputations, organizations and a track records of after-sales support and re-sale / residual value.
Also, Canada is a cold place with long distances and tough driving conditions and so 2- and 3-wheelers would be very unlikely to ever gain significant market acceptance – even if the safety police and insurance people would allow them. I mean – how have these types of lightweight “pseudo-cars” done over the last 125 years?
The M-B Smart car…..gone.
A small tin-can vehicle like a Suzuki Samurai or a Subaru Justy would never pass current safety standards – at least not at a manageable cost. Look at how well the Nissan Micra is doing in the NAM market (it has been withdrawn for vanishingly small sales). Sorry – micro-cars are a dead end. Nobody really wants one.
Also, Subaru is a division of Toyota and we already have several Toyota plants here in Canada.
That said, the overall task of developing the car itself is just one aspect of the challenge – and in some respects, it is actually not the most daunting issue.
Keep in mind that the average vehicle on the road is 11 years old – so this new “Maple Motors” vehicle must be sold AND it must endure in the marketplace for several decades if it is to be competitive (and if it isn’t competitive – why bother at all).
You’re not developing a new type of milk jug that only has to last for a few weeks before being recycled.
Also, every single Maple Motors vehicle sale will be a conquest sale – stealing marketshare from Toyota, Honda, Hyundai, Nissan, Ford, Stellantis, the German brands and yes, even those other people at General Motors and Tesla (and just look at how well they are doing these days…..YIKES!).
So – let’s make a list of what car companies need to compete in an established market:
1) some sort of national parts & service product support organization,
2) a marketing and sales arm (which would require a major up-front investment by the putative automaker) and,
3) a network of dealerships (which are nearly always private local investments by local business people).
As for other markets – we need to appreciate that there will be no export opportunities – NONE. There is no way the US, Japan, China, the EU, India, Mexico, Brazil, Turkey, Indonesia or any other significant market would permit a new competitor from abroad when they already have competent local OEs in-place or are attempting to establish their own.
That is, of course, aside from the fact that any other market would need all of the marketing, sales, service and parts dealership etc. infrastructure that we already do not have here in Canada.
Sorry friends, the auto industry of 2025 is a mature industry with established and in most cases, pretty competent competitors already established in every worthwhile market.
This means that a new entry would be very hard-pressed to succeed in Canada or abroad – regardless of what product(s) it brings forward.
As I have mentioned, this isn’t just me talking. These views are the outcome of months of dialogue with other industry and government experts.
As for the folks advancing this idea – I wish them well, but they’ve got to find somebody with very deep pockets, a very high tolerance for risk, and a lot of patience to wait years for sales to get going.
It’s one thing to build a rolling prototype in a university lab to chauffeur the PM around Parliament Hill for a press photo-op – but quite another to design and build hundreds of thousands of safe, efficient, durable, high-quality vehicles that can compete for consumer dollars in the already crowded retail market.
…and again, I am a patriot and would love to see this work – but Canada has a lot of challenges to face-down this yank menace and we need to be wise and realistic in choosing which ones to take on and what to do next.

27 June
Byron Haskins: The story didn’t even get into the issues of patents and intellectual property rights involved in producing vehicles. Laws, lawyers and court cases … Then, making a successful, practical vehicle that “everyone” will want to buy is not really possible. This is why we have sedans, pickup trucks, vans, crossovers, several kinds of sports vehicles, etc. built on differing chassis, with varying power drivetrains and body configurations. We have never really ever had one “American car”. So what kind of purpose does the “Canadian car” first emerge?

26 June
Is it time for Canada to build its own car? (YouTube)
With U.S. President Donald Trump threatening to upend Canada’s automotive industry, some say it’s time for a homegrown solution. For The National, CBC’s Nick Purdon looks at what it would take to have an industry-leading Canadian car company.
… [Dr.] Peter [Frise] has given a lot of thought to the idea of a Canadian car and he has concerns.
“I think a lot of people would love to see a Canadian car -I would- but who is going to step forward from the private sector to invest the money to get a big car company going – a credible car company that can make credible products that are competitive in the marketplace- and we’re talking billions of dollars – billions!
You know is this one of those times when you have to separate your heart from your head; you can’t make emotional decisions about money and technology. These are much too complicated much too expensive to make on an emotional basis …
If somebody wanted to design a brand new car what’s the timeline on that?
It takes between two and five years to design a new car. I mean you could you could design and build a great car and have no customers. The car companies compete ferociously to get a few tenths of a percent of market share gain.
This car company will have no track record and I’d be concerned that there will not be enough customers to sustain this.”
Peter points out that this has actually happened; you may not have heard about it but in the mid-70s in New Brunswick they made the Bricklin at the time Premier Richard Hatfield
said some things that really could apply to Canada today: we in New Brunswick in the opinion of many are not supposed to be in the business of producing automobiles
[A Brief History of the Bricklin: Canada’s Gullwing “Safety Vehicle”]

December 2024
The Canadian Muscle Car That Time Forgot
In the world of automotive performance, certain countries are renowned for their sports cars – Italy for Ferrari, Germany for Porsche, Great Britain for Lotus, and the United States for the Chevrolet Corvette, along with a plethora of unique and thrilling V8-powered muscle cars. They’re the kinds of reputations that took years to build, and they’ve only become more entrenched with time. As a result, it’s made for a tough market to break into if you’re not among the established players.
One nation that has proven conspicuously absent is Canada. In spite of the many cool Canadian cars, and its proximity to America and its car culture. However, that’s not to say that the country is without potential. On the contrary: As you’ll see with this oft-forgotten muscle car (or is it a sports car?), Canada nearly had a winner back in the 1970s.
An experienced entrepreneur, Malcolm Bricklin made his first foray into automobiles by selling quirky bubble cars under the banner of Subaru America. Despite growing consumer concern for fuel economy and a niche but expanding market for subcompact vehicles, the tiny Subaru 360 Micro really wasn’t suited to American roads or traffic. Frustrated by a lack of sales, Bricklin sold his stake in the company and decided to try something even more ambitious: building a car of his own.