Good morning, members of the committee and Madam Chair.
Clean Energy Canada is a national think tank at Simon Fraser University that is focused on advancing the country's energy transition.
I want to acknowledge, as the other speakers have spoken to, that this committee is studying a complicated issue involving geopolitics, security and a technology shift. These are issues that attach to much of the relationship and trade between Canada and China, as China is Canada's second-largest trading partner.
To zoom in on electric vehicles for a moment, there are a few key facts.
Electric vehicles will save Canadians money, period. Electric vehicles reduce carbon emissions over their lifetime versus a fossil fuel-powered vehicle, period. Electric vehicles are at the bottom of a long ladder of technologies that we can electrify to improve efficiency and affordability in people's lives, which is why they're the first technology to kick off a global shift to electrification, period.
The last period is this: The global auto sector is undergoing a rapid transformation. EVs are expected to make up 30% of new sales worldwide this year, and 40% by 2030. China is poised to see a sales share of around 80% by this time. China bet on electric vehicles almost two decades ago and now has a head start in technology, producing cost reductions and exports that can dominate global markets. You can't have a strategy around the future of transportation without having a China strategy, period.
In the summer of 2024, when Canada first announced the 100% tariff on Chinese electric vehicles, we noted that the federal government had had an opportunity to take a measured approach that balanced the priorities of traditional automakers in Canada's local industry with the needs of affordability-constrained Canadian consumers and our climate. Instead, Canada started with a 100% tariff approach—one that mirrored only the U.S. at that time—while Ethiopia, Australia, Brazil, the U.K. and Nepal gained access to lower-priced Chinese EVs and experienced the massive savings that come with these vehicles. Our recent analysis shows that in Canada these savings can be between $23,000 and $32,000 over 10 years of vehicle ownership. This year, we ran those vehicles that are currently on the market in a comparator of two popular Chinese models—without the federal rebate—that could make their way to the Canadian market potentially. These figures were before the recent hikes in gas prices.
To be clear, Clean Energy Canada does not support fully opening domestic markets to Chinese EVs at this time, but if Canada wants to have an auto sector in the future, let alone a competitive one, we need to be able to produce high-quality, affordable EVs and the parts and materials that go into them. “Technological and production cost reduction advancements by Chinese automakers and battery manufacturers present an opportunity for Canada to diversify its electric vehicle supply chains through strategic partnerships.” That's not Clean Energy Canada. That's the chief economist of TD Bank in 2025.
While unrestricted exposure risks wiping out domestic industry, controlled competition forces domestic manufacturers to step up their game and learn. Joint ventures can help bring technology and know-how to our manufacturing base. This can all drive innovation and productivity gains, while leading to better cars for consumers. Take the EU, which reached 27% new electric car sales in 2025. It maintains tariffs on Chinese EVs, but these are lower and more flexible tariffs. It has over 20 EV models available at sub-$40,000 Canadian price points. Only seven of those are from Chinese brands and 10 are European.
Chinese EV manufacturing plants have led to investments up the supply chain for local suppliers. Last June, BYD announced that Voestalpine, an Austrian steel manufacturer, will supply their $6-billion EV plant in Hungary. Similarly, Forvia, a French car parts supplier, has signed a deal with BYD's second EV factory in Turkey. Some local suppliers have cited falling demand from existing automakers as an issue that Chinese automakers can make up for.
A two-pronged approach of selective exposure to Chinese EVs and opening the market simply back to 2023 levels, or below 3% of the market, plus preferential market access for domestic producers, is a better path for Canadian auto sector competitiveness into the future.
At the end of the day, the Canadian government also needs to be standing up for Canadian consumers. Canadians want these vehicles and believe they'll be of high quality. Our January 2026 polling shows that more than one-third of Canadians are open to buying a Chinese EV. Among the 50% of Canadians who are interested in an EV generally, 70% expressed varying levels of interest in getting a Chinese one.
By allowing the sale of a limited number of Chinese EVs into Canada at a lower tariff rate, and by reserving a rising portion of this quota for EVs with an import price of less than $35,000, Canada is making the right choice. It's focused on creating the affordable EV segment we've been missing, while setting us up for success in a swiftly changing global market.