“This action follows the automakers’ unacceptable decision to scale back their manufacturing presences in Canada, directly breaching their commitments to the country and Canadian workers,” the government said in a late-night media release.
Tesla was boycotted by Canadian consumers, and I’m sorry to say, ‘and with a lot of sadness,’ this will be my last GM product in my driveway. As a trucker once said, “How do you like me now?”
I like the limit at 1, only because there’s no embiguity then. One. The rest you pay tariffs.
Make it 10 years; none of this “until Trump stops being a baby” nonsense. 10 years will push someone into starting a plant.
European, Japanese and Korean cars are better anyway.
We need our own Canadian owned car company, that we can build and ship at scale to ourselves.
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Market is too small to survive.
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Name one quality product designed and made in Canada.
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Even if we did this, needledicks would still need their Silverados.
Germany is only double our population, and they have VW/Audi, Mercedes/Smart/Maybach, BMW/Mini/Rolls Royce, Porsche and Opel. And their wages are higher than us. We have no excuse.
What a fantastic argument. “We don’t make anything good, therefore give up”. This logic has always irked me. “We call this invention ‘the computer’! It’s not very fast, and the quality is a bit shaky, so we are just going to give up now and never do this again, because it’s not very good.”
Right…
“market is too small”
89% of households have at least one vehicle. That’s not a small market
Well dontcha know you can only make a viable company if you sell 4 million cars per year?
Canada has about 1.8 million new vehicle sales per year. It’s not impossible to serve a market that small, but a lot of profits in the auto industry are due to their ability to scale.
Any new manufacturer will have to start in the high priced, low volume, luxury segment anyway, but there isn’t huge room for growth while remaining in Canada.
If they expand to the States, then they just end up with the same problems we have now. If they expand to Europe, shipping is a pain, though doable. But if that’s the plan, anyone with enough money to start a new car company will probably just start it in Europe to begin with, since Europe has a bigger market than Canada.
The other way to do this would be a non-profit or Crown corporation, where profitability isn’t the goal. That has a lot of other issues, but avoids the biggest one.
Canada has about 1.8 million new vehicle sales per year. It’s not impossible to serve a market that small, but a lot of profits in the auto industry are due to their ability to scale.
A market of only 5000 cars a day?!? That’s peanuts.
Is … is that your point? That 5000 cars A DAY is somehow small?
The Oakville Ford plant produces 200-300K vehicles per year. That plant is profitable at that scale. We’ll need 6-7 like it to satisfy our current needs. If we license manufacturing and models from another firm, we can start building the same vehicles at similar cost of production as the original maker since we’d skip the R&D. Lots of precedents for this sort of arrangement, past and present. China did it with western autos by creating 50-50 joint ventures. They built factories there and began production of their existing vehicles. The first was VW I think, back in the late 70s or early 80s. We could do this with existing plants of departing US manufacturers. Maybe wholly owned by “Vehicles Canada.” Trump wins, being number #1 in car manufacturing. We win sovereign vehicle manufacturing he can’t destroy. 🤔
Are you under the impression that this new manufacturer will somehow capture the entire market?
To use Tesla as an example, since they’re the largest and fastest growing “new” auto manufacturer… In 2024, they sold about 50,000 cars in Canada, and manufactured 1.7 million. So we’re barely 3% of their market, and if their Canadian sales drop to zero (as they should), they would barely notice.
As you said, licensing could save a lot of R&D costs, but it would almost certainly come with a stipulation that we couldn’t sell the vehicles outside of Canada. If a new manufacturer were to take up the entire Tesla market in Canada (which would be incredibly ambitious), they’d need to be about a quarter (or less) of the size of the Oakville Ford plant. I don’t think that it can be profitable at that scale, but I’d love for someone to prove me wrong.
Are you under the impression that this new manufacturer will somehow capture the entire market?
Of course not. It’s a hypothetical that illustrates how many plants worth of vehicles we consume in some tangible manner.
Also my point is that the fixed cost other than R&D and administration is per plant, not per manufacturer. So given Ford’s example, a plant that makes 250K per year in Oakville is profitable assuming no other costs. I don’t know how much the rest of the costs would be. A back of the napkin of 3000 extra employees making 200K/yr each is $2.4K per vehicle at 250K vehicles per year. Can a lean manufacturer run on 3000 admin and R&D staff? Don’t know. But it doesn’t sound impossible. Slate Auto has 250 and they seem to have produced working prototypes.
But given that there’s Honda and Toyota made here, we probably won’t have to venture there either way.
As for looking at existing large manufacturers like Tesla, I don’t think they’re a good way to gauge how low of output is sustainable because these manufacturers aim to grow as large as possible and maximize profit. If they can spend $240 per vehicle in R&D and admin instead of $2.4K by growing to other markets, they will do exactly that. They don’t aim to satisfy a transportation need. They aim to create shareholder profit. So they’ll get to the $240 and they’ll give the remaining $2160 to their shareholders. The hypothetical firm that has a mandate to fulfill (or supplant) a country’s transportation needs instead of maximizing profit would not give that $2160 to the crown, and give it to its employees instead. Allowing it to have 3K of them with lower production output at the same price.
All hypothetical of course. Could be wrong. I’m just thinking here.
maybe the market is now too big to cater too and countries should start focusing on themselves if the rest of the world won’t play nice.
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Canada should do the same with Chinese vehicles - at least, as it’s possibly a better idea to not let them in.
Yes. Quotas at a small tariff level would mean that they would charge a fair price, and quota goes up as their investment in Canada goes up.
These cheap Chinese cars are made with slave-like labour and other coercive measures, no tariffs can ever change that. When made by slave-labour, there is no such thing as a fair price.
China’s competitive advantage in autos is entirely based on abundance (cheap) of materials and automation advantage, as well as local government support. There is zero slave labour in the process. By “fair price”, I meant comparable to our existing options due to quotas and small tariff. This would help fund their investments in Canada.
im a little suspicious of there being zero slave labor with china EV’s. I’m not saying its impossible, just based on their track record i’d like to see proof that its truly slave labor free.
Since there’s a lot of propaganda around slave/no-slave labour from different sides, I’d offer another angle which is easier to verify. Check what percentage of a typical vehicle cost comes from labour. Then from that, check the manufacturing wages in different locations and scale the labour cost by that. That’s will give you the ballpark labour cost advantage between. Then compare that with equivalent vehicle prices. You could do the same exercise for Mexico-produced vehicles too.
Also you should check how the labour conditions are in Mexico. A lot of our vehicles are built there and a lot of the components of our Canadian-built vehicles are made in Mexico. And then nearly all the transistors, resistors and other electronic components in those components are made in China. You might also find that Mexican wages in the industry are significantly lower than those in China.
None of this is to say that we should not care about working conditions. Rather that absolute ethical judgements are practically impossible thanks to our neoliberal free-trade system that created these problems without our consent. We aren’t given the choice between a Canadian-made Ford Mach-e at $60K and a Mexican-made one for 50K. It’s all Mexican-made for $60K. We aren’t given the choice of a $60K, Canadian-made, slave-free-certified Lincoln Nautilus and a $50K, Chinese-made one. It’s all $60K Changan-Ford made Nautilus. No one asks the workers what they want to build in Ingersoll, or Oshawa, or Oakville. So we’re forced to choose between different turds with different seeds in them. Some turds are deadlier than others depending on the year we live in.
PS: One more thing, relevant to the price-wages relationship. Prices aren’t set according to costs. Prices are set to the maximum level where the output times the price produces the highest profit. Whether the cost is 1% or 80% of the revenue. The wages are set to the lowest level possible allowed by the labour market conditions (not the product market), on labour power (union organization) and government regulation (minimum wage, mandatory benefits, union-friendly laws, etc). I used to fall for the narrative that there’s a positive relationship between prices and wages within a firm but that’s just not true. It’s not true theoretically or practically. There’s only a relationship in that wages set a bottom of the price below which the firm would go bankrupt. And that’s no different than any other cost like materials and machines. Above that level, the limit is whatever they can get away with. That’s neatly demonstrated by the lack of difference in price between vehicles made in Mexico, US and Canada even though wages are significantly different between the three.
i agree 100% and im not ignoring the other companies that do it, they are to blame just as much as others. EVERY company producing cars at every step should be paying their workers a fair wage and fair working environments. My point was that the cost of china EVs were really low, whats the calculus that brings their prices so low with accounting for their workers, and should we just be allowing more of the same (or worse idk) or do we do a made in Canada approach? I am of the mind that canada shouldn’t have a big manufacturing base for more simple parts, be we can do more complex work like a automotive factory or engine factory or however its laid out, and import the base materials from our EU partners.
Yeah I get you completely. I used to think it’s labour cost but these days I’m of the mindset that it’s margin stacking and profit maximization on our manufacturers’ end. See this:
PS: One more thing, relevant to the price-wages relationship. Prices aren’t set according to costs. Prices are set to the maximum level where the output times the price produces the highest profit. Whether the cost is 1% or 80% of the revenue. The wages are set to the lowest level possible allowed by the labour market conditions (not the product market), on labour power (union organization) and government regulation (minimum wage, mandatory benefits, union-friendly laws, etc). I used to fall for the narrative that there’s a positive relationship between prices and wages within a firm but that’s just not true. It’s not true theoretically or practically. There’s only a relationship in that wages set a bottom of the price below which the firm would go bankrupt. And that’s no different than any other cost like materials and machines. Above that level, the limit is whatever they can get away with. That’s neatly demonstrated by the lack of difference in price between vehicles made in Mexico, US and Canada even though wages are significantly different between the three.
I recently looked at the F-150 price over the last 30 years. It’s grown over 5% per year. That’s way above inflation and wages move more or less with inflation. That’s tells me Ford is just increasing the price as they can whenever they can. Now do the same thing for all their sources - Bosch, Denso, Magna, SK (for EVs) etc. If everyone is doing that those margins stack and make Ford’s cost higher. There’s often little competition between suppliers.
Now if you take someone like BYD who makes most of those components in-house they don’t charge themselves margins on their batteries, motors, etc. So their costs are lower. We know that BYD along with the rest of the EV makers in China are in a brutally competitive market. So they can’t charge high prices, leaving the prices close to their costs. Of course they still source components from other firms. They don’t make electronics. But what if those other firms also can’t/don’t profit-maximize due to competition or regulation? When I add that together I think it makes for a better explanation to the price difference given that the differences between labour costs in Mexico, Canada and US produce zero difference in vehicle prices. At least that’s where I am on this one lately. I used to think it’s all down to labour cost before I started digging a bit in wages in different places and how firms set prices. That’s why I encourage people to look into those things.
do we do a made in Canada approach
We absolutely do. That should be the long term goal since factories don’t show up overnight. If the US autos are going back to their own country and scaling back EV production plans, we should get whoever wants to build EVs here. Unifor can handle labour conditions and wages on our end. Taxed direct imports could be useful as a stop-gap under certain conditions since NA autos aren’t getting any cheaper, but I won’t be mad if we say, no-imports, build factories here from the get go.
E: Sorry for the walls of text. I’m trying to explain what’s in my head and it always comes out longer than expected. 😅
Booo I want my full flood of China cars. You Wana be the "domestic manufacturers "? Well good, keep your domestic overpiced inefficient shitboxes at home.
Yeah, just that you can see how the flood of ChEaP cHiAnA cArS are made, a recent example from Brazil:
[In Brazil], in the same month that Chinese BYD’s car carrier arrived in the country, Brazilian prosecutors announced plans to sue BYD and two of its contractors for ‘slave like conditions’ at a factory site. A task force led by Brazilian prosecutors said it rescued 163 Chinese nationals working in “slavery-like” conditions at a construction site […] where Chinese electric vehicle company BYD is building a factory.
The [Brazilian] Labor Prosecutor’s Office released videos of the dorms where the [Chinese] construction workers were staying, which showed beds with no mattresses and rooms without any places for the workers to store their personal belongings.
Officials said [BYD contractor] Jinjiang […] had confiscated the workers’ passports and held 60% of their wages. Those who quit would be forced to pay the company for their airfare from China, and for their return ticket, the statement said.
Prosecutors said the sanitary situation at BYD’s site in Camaçari was especially critical, with only one toilet for every 31 workers, forcing them to wake up at 4 a.m. to line up and get ready to leave for work at 5:30 a.m.
see this is what i don’t like. and it goes to show where those “cost savings” are coming from for the cars
I want my full flood of China cars.
Enjoy your TEMU car.
See Australia. They stopped local car production with Ford and GM, they were the first to import Chinese EVs, and surprise, they are flimsy shit.
Now, BYD is dumping cars into Australia, filling up every parking lot they can find, while suppliers in China and not getting paid. The whole Chinese EV industry is a bubble.
Does it really matter how long the fucking thing lasts when you’re signing a lease for 2-3 years anyways? No probably not. But what does matter is if the lease payment is gonna be $200 bi weekly and not $350-400
