Electric vehicles for export are parked at a port in Hangzhou, in eastern China's Zhejiang province, on April 2, 2025.-/AFP/Getty Images
Margaret McCuaig-Johnston is a senior fellow at the Graduate School of Public and International Affairs at the University of Ottawa and the inaugural co-chair of the Electric Vehicle Technology Roadmap for Canada.
In the lead-up to last month’s meetings in Beijing, government officials reassured Canada’s auto companies that electric vehicles were not on the table.
Not true.
Prime Minister Mark Carney announced that he had agreed to drop the tariff on Chinese electric vehicles from 100 per cent to 6.1 per cent, allowing 49,000 autos to be imported per year, rising to 70,000 over five years, which would be more than half the number of EVs sold in Canada in 2025.
And Mr. Carney gave Beijing an even bigger prize: a commitment to allow EV manufacturing in Canada, giving them the foothold in North America they’ve been seeking.
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If the Canadian government had consulted with our auto companies, it would have learned about the challenges it would face in introducing Chinese EVs, beginning with national security.
It is widely known that the software in EVs made in China send the data from the cameras, microphones and location to China. Regular software fixes are made remotely from China. The contents of your phone can also be downloaded when it’s charging in the car.
Under Section 7 of China’s National Intelligence Law, companies and individuals are required to spy for China if requested, and keep that spying secret.
Other countries are waking up to this problem. In November, Israel’s government blocked military officers from driving the 700 Chinese vehicles that the Israel Defense Forces had bought for them. That same month, Norway discovered that Chinese-made electric buses could be turned off remotely by the manufacturer, a factor for autos as well.
A 2025 U.S. Department of Energy report on Vehicle-Grid Integration says that an attack via charging infrastructure can pose a major threat to the electricity grid causing local disruptions such as brownouts. Last month, John Moolenaar, the chairman of the U.S. House Select Committee on China, called Chinese EVs a Trojan horse, functioning as “potential spy platforms with a kill switch inside.” This month, U.S. Ambassador to Canada Pete Hoekstra said that the U.S. border would not necessarily be porous to Chinese EVs driving across.
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In Brazil, where China sought a foothold in South America, Chinese forced labourers worked at a BYD factory there. More than 200 Chinese workers were kept in barracks in atrocious living conditions under armed surveillance, working seven days a week. The Brazilian government successfully sued BYD and its contractors, winning around $10-million for its “slave-like conditions.” The completed factory is highly roboticized, as are other Chinese EV factories, but the Brazilians working there have staged demonstrations complaining bitterly of poor working conditions and inadequate pay.
Up to 350 Chinese workers, with their security service, are now building a BYD plant in a village in Hungary. Until Canada’s deal, most democracies have declined such factories.
Beijing plays hardball, and last fall changed regulations that would require companies, including European auto companies, to share intellectual property in exchange for rare earth and magnet components.
EV tariffs in Europe are 7 to 35 per cent, and Chinese sales are eclipsing not just sales of some Western EV companies but gaining ground at the expense of internal combustion vehicles, leading to the loss of tens of thousands of jobs.
They are priced at 10 to 15 per cent below the local competition – whatever is necessary to get the sale. That drove the European Union this month to announce that it would be bringing in regulations to set minimum prices for Chinese vehicles so that local auto companies would be more competitive. The Canadian deal with Beijing goes in the other direction, setting a maximum price of US$35,000 for at least 50 per cent of Chinese EV sales by 2030. This is far lower than the average $63,000 for a North American EV sold in Canada in 2025.
Industry Minister Mélanie Joly also announced in China that we would be entering into joint ventures, especially in clean energy. I’ve conducted a six-year study of more than 30 Canadian technology joint ventures in China which have all had major problems, with the Chinese partner taking a majority share of 70, 80 or even 90 per cent of the ratio and profits, often using tactics to ease the Canadian partner out completely over time and keep their intellectual property and factory equipment.
The saddest cases were in clean energy.
In USMCA negotiations this year, the Canadian government will need to decide whether the few jobs in roboticized Chinese EV factories are worth massive job losses in Canadian auto companies, with the private information of Canadians flowing to China. The very welcome move to drop the mandate that all new vehicle sales be electric by 2035 and re-introduce incentives, which do not apply to imported Chinese EVs, will not address these critical problems.