Automotive

Free Trade and EVs in Canada

We don’t talk a lot about Canada, but with the Inflation Reduction Act incentivizing any North American production, this free trade agreement will only become more important in the coming years.
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Free Trade and EVs in Canada

Back in 2020 the United States-Mexico-Canada (UCMCA) free trade agreement came into effect and has been undergoing a rigorous "interpretation" period ever since.

So what's the rub? 2 conversations are ongoing.

  • First, the agreement states 75% of vehicle components must originate in the region - Canada and Mexico are looking for flexibility.
  • Second, Mexico has been restructuring its energy and mining sectors - which could threaten existing Canadian investments.

Canadian leadership says a decision will come soon regarding the regional dispute.

What else is new with Canada? Well, they increased their EV sales by 35% this year. 1 in 14 vehicles bought in Canada is an EV, while in the same period in 2021 was closer to 1 in 20.

The country is pushing to electrify 60% of total sales by 2030, with a complete ICE ban after 2035. Currently, around 80 BEVs are for sale with an average price of over $80K. However, the existing $5,000 rebate incentive only applied to models below $55K.

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