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. 😅