Tesla had approached Ottawa to lower tariffs on its cars ahead of Canada's announcement this week of a 100 percent tariff on China-made EVs, Reuters reported.
Tesla (NASDAQ: TSLA) had reportedly sought special treatment in Canada to avoid facing high additional tariffs on its China-made electric vehicles (EVs).
Prior to Canada's announcement this week that it would impose 100 percent tariffs on China-made EVs, Tesla had approached Ottawa and asked for a lower tariff on its vehicles, Reuters said in a report yesterday, citing a Canadian government source.
Canada's Department of Finance announced on August 26 that starting October 1, 2024, it would impose an additional 100 percent tariff on all EVs made in China.
Currently, the tariff applied to Chinese-made EVs exported to Canada is 6.1 percent. When the additional tariffs come into effect, the rate they face will rise to 106.1 percent.
Canada's move follows the lead of the United States and the European Union -- who have already announced additional tariffs on EVs from China.
Tesla approached Ottawa ahead of Canada's official announcement, Reuters said, citing the source, adding that the US EV maker asked for a rate similar to what it received in the EU.
The European Commission announced new proposed tariffs for EVs from China on August 20, with Tesla's China-made vehicles facing a 9 percent rate, lower than the 20.8 percent in the previous provisional resolution.
Tesla submitted a request for an individual review to determine its tariff level based on the specific subsidies it receives, according to a statement from the European Commission at the time.
The European Commission verified the information during a verification visit to China and conducted the same checks on a sample of other Chinese exporting producers, the statement said.
In the EU, EVs from different Chinese carmakers face different tax rates, up to 36.3 percent, with BYD (HKG: 1211, OTCMKTS: BYDDY) and Geely at 17.0 percent and 19.3 percent, respectively.
The number of China-made EVs currently exported to Canada is small, with Tesla being the main contributor.
The value of Chinese EVs imported into Canada soared to C$2.2 billion ($1.6 billion) last year from less than C$100 million in 2022, Bloomberg said in an August 26 story citing Statistics Canada data.
The surge in the number of Model Y cars arriving at the Port of Vancouver from China came after Tesla began shipping them from its Shanghai factory, the Bloomberg report noted.
However, the Canadian government's main concern is not Tesla, but the prospect of cheap cars made by the Chinese automaker eventually hitting the market, the report said.
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