FYI: Canadian government may lower tariffs on Tesla’s China-manufactured vehicles.
Tesla Appeals to Canadian Government for Reduced Tariffs on Giga Shanghai Imports
Tesla has reached out to Canadian authorities, seeking a reduction in tariffs for electric vehicles imported from its Giga Shanghai facility in China. This comes in the wake of Canada’s recent decision to impose a 100% duty on all China-made electric cars.
### Tesla’s Strategic Move Prior to Tariff Implementation
According to a Canadian government source, Reuters reports that Tesla has been in discussions with Canada to secure a tariff rate similar to what the company achieved in the European Union. Notably, Tesla’s appeal was made even before Canada publicized its plan to impose a 100% duty on electric vehicles (EVs) from China, a policy set to take effect on October 1, 2024.
### Anticipated Impact on Popular Models
This new tariff would impact a wide variety of imported electric vehicles, including Tesla’s Model 3 sedan and Model Y crossover from Giga Shanghai. As of now, Tesla has remained silent on the issue, and Canada’s Finance Minister, Chrystia Freeland, has also declined to comment on any discussions with Tesla.
### Past Successes in Europe as a Precedent
Tesla’s attempt to negotiate lower tariffs in Canada is not without precedent. Earlier this year, the European Commission introduced provisional tariffs on EV imports from China, initially assigning Tesla a duty rate of 20.8%. Following Tesla’s request for a review, the rate was revised down to 9%, in recognition of the fewer subsidies Tesla received from the Chinese government compared to competitors.
### Significant Imports from Giga Shanghai
Tesla has ramped up its imports from its Shanghai Gigafactory to Canada. Reports indicate that imports of vehicles from China to the Port of Vancouver surged by 460% year-over-year to 44,356 units in 2023, coinciding with Tesla’s increased shipments from its Shanghai facility.
### Conclusion
Tesla’s proactive steps to secure lower tariffs in Canada underline the company’s strategic efforts to manage costs and pricing for its international markets. If the Canadian government responds favorably, it could provide Tesla with a competitive edge in the Canadian EV market, mirroring its success in Europe.
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William Kouch, Editor of EV news for automotive.fyi.
