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PAINFUL TRUTH: The EV price conundrum

Allow in cheap Chinese EVs, or hope local prices come down soon?
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A BYD Seagull electric vehicle is displayed at the Caresoft Global facility Wednesday, April 3, 2024, in Livonia, Mich. Caresoft President Terry Woychowski, a former engineer at General Motors, said the Seagull represents a “clarion call” for the U.S. auto industry. (AP Photo/Mike Householder)

Electric vehicles are cheaper to operate than their gas-powered counterparts. Fuelling up a battery, whether with a home charger or a paid fast charger, just costs less than pouring gas into a tank.

That was supposed to help speed the adoption of EVs, even though their prices are higher than similar internal combustion engine (ICE) cars and trucks.

But sticker shock is still a barrier to adoption.

Worse, for our lungs and the planet as a whole, EV prices aren’t declining as fast as some had predicted. 

There is a source of much, much cheaper EVs, right now.

But it’s complicated, because that source is China.

Chinese firms like BYD began partnering with Western companies to build battery EVs and hybrids years ago. During the past decade, they’ve gone out on their own, ramped up their manufacturing abilities, and as of a couple of years back, have begun cranking out mass quantities of cars at bargain-basement prices.

The Seagull, BYD’s cheapest EV, got a price cut to 69,800 yuan in March. At the present exchange rate, that would be about $13,375 Canadian dollars.

Even if you doubled that and rounded up, $27,000 would be significantly cheaper than the cheapest EV currently available in Canada.

A CAA list of every EV currently for sale in Canada shows only two come in below $40,000 – the Fiat 500e and the Chevrolet Bolt LT. Another handful hover between $40,000 and $50,000.

Naturally, the European Union and U.S., both trying to dramatically increase EV adoption, have shut the door to Chinese EVs with steep tariffs. Canada is considering doing the same.

Why? Fears of competition, of destruction of local jobs, and that the Chinese cars have hidden costs.

Does a BYD Seagull really cost $13,375? Or is that cost being underwritten largely by massive Chinese government subsidies? 

Is it really “cheap” if it’s the product of a repressive regime that overrides labour rights and allows environmental destruction as part of the cars’ supply chain? 

Would letting in Chinese cars give Canadians a few years of cheap EVs, gutting North American auto manufacturers, only for prices to go up as soon as automakers like Chevrolet, Toyota, and Volkswagen are gutted by their inability to compete?

On the other hand, when it comes to government subsidy, China is far from the only offender.

During the past five years, federal and provincial governments in Canada have invested more than $46 billion in EV, battery, and supply chain production in Canada, according to a report this year from the parliamentary budget office.

In the short term, tariffs and subsidies are meant to give existing and new Western auto firms time to catch up, improve their tech, and bring down prices. They could also be a lever to force China to improve labour and environmental policies.

But what we don’t want is long-term trade barriers, propping up our industry and a few thousand jobs with a flood of government money, and still no cheap EVs while the planet keeps getting hotter.



Matthew Claxton

About the Author: Matthew Claxton

Raised in Langley, as a journalist today I focus on local politics, crime and homelessness.
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