Chinese EVs won't break Canada's car market — but they could improve it

National Observer

2 days ago

When my wife and I travelled to Iceland earlier this summer, I was determined to explore its otherworldly landscape through the windshield of an unfamiliar EV. It was an easy decision.
I knew the country had one of the highest EV adoption rates in the world (42 per cent of vehicle sales in Iceland were electric last year) and the rental company had plenty of electric options available. Driving from Reykjavik to Egilsstadir turned out to be a breeze — Iceland has a fantastic charging network — and my wife and I probably saved a few hundred bucks on gas.
But here's the kicker: while I thought I was getting an electric Renault, when we went to pick up the car, lo and behold, they handed us the keys to a BYD Dolphin.
Some context is in order: my employer, Clean Energy Canada, has been in the news recently with polling conducted with Abacus Data showing that four in five Canadians oppose the current 100 per cent tariff on Chinese EVs and would prefer either a lower tariff or no tariff at all.
Little has changed since then. It still remains unclear which path Canada will take on this and other critical EV-related decisions, including the fate of the EV availability standard (a policy requiring automakers to supply more EVs), the promised return of consumer incentives and — at a more fundamental level — whether Canada will follow Trump's metaphorical exhaust pipe or instead align ourselves with the wider world, where one in four cars sold this year are expected to be electric.
Lest one think I'm a shill for Chinese EV makers, I assure you my experience was quite the coincidence. I'm only certain I saw one or two other BYDs on the road the entire time we were in Iceland and the one they handed us appeared to be brand new, though apparently they are growing quickly in popularity. I did see a lot of EVs generally, however, including many I've never seen on North American roads.
So, what was it like driving a BYD, you wonder? It was, well, perfectly fine. Driving a BYD actually changed how I view Chinese EVs, but not in the way you might think. After all, for Canadians, Chinese EVs are mythical unicorns we read about but never actually drive or even see on the road.
Driving a BYD actually changed how I view Chinese EVs, but not in the way you might think. After all, for Canadians, Chinese EVs are mythical unicorns we read about but never actually drive or even see on the road.
In reality, it was an economy hatchback with decent range that would directly compete with the Chevy Bolt, a car launched by GM in 2017 and paused in 2023 despite being the most popular non-Tesla EV in the country at the time (a new version should come back next year).
What I drove across Iceland wouldn't crush the competition, just as it hasn't in other Western nations, where Chinese EVs typically capture less than 10 per cent of the local EV market. What it would do is give buyers another option — and, crucially, one in the all-important sub-$40,000 category of which Canadians have too long been deprived. (A quick note: no one is selling you a $15,000 EV in Canada, despite whatever headlines you may have read. BYD builds and prices cars for the specific markets it sells in and often still faces tariffs, just not ones set at 100 per cent.)
Canada's car market has a serious gap in need of filling: the aforementioned Chevy Bolt has been paused for quite some time, despite its popularity. Nissan never seized its early-market advantage with the Leaf. Tesla spent years building a child's drawing of a truck instead of the affordable mass-market EV it could have. In market research Clean Energy Canada conducted with Abacus Data to be released this September, we found that a price tag under $40,000 was an especially important line for many car buyers — and yet Canada no longer has an appealing electric option to offer these folks.
Other places have the affordable EVs budget-minded Canadians want — not all of them Chinese — but early evidence is emerging that the mere presence of Chinese EVs improves local market conditions and consumer adoption. That's what competition does. We know competition is good for affordability and consumers know it too.
As for legacy automakers, the existential threat of Chinese EVs isn't the car I drove across Iceland. It was certainly a solid, feature-filled, affordable EV that would find a receptive market here in Canada. But a magical unicorn it was not. I've driven nicer EVs.
Rather, the threat of Chinese, European and South Korean EVs is this: while I saw the occasional American truck and many Teslas in Iceland, I did not see a single electric car from a legacy U.S. automaker. Not one.
The maxim of our time once again applies: a tariff cannot save America from itself. That's on them. But it certainly shouldn't be on Canada and Canadian consumers.