PAINFUL TRUTH: The EV Pricing Dilemma

Electric vehicles are cheaper to run than their gasoline-powered counterparts. Filling up a battery, whether with a home charger or a paid fast charger, simply costs less than putting gasoline in a tank.

This should accelerate the introduction of electric vehicles, even though their prices are higher than those of comparable cars and trucks with combustion engines.

However, the price shock still represents an obstacle to adoption.

Worse still, for our lungs and the planet as a whole, electric vehicle prices are not coming down as fast as some had predicted.

There is currently a source for much, much cheaper electric vehicles.

But it's complicated because the source is China.

Chinese companies like BYD began collaborating with Western companies years ago to build battery-powered electric and hybrid vehicles. Over the past decade, they have branched out on their own, expanded their manufacturing capacity, and in the last few years have begun mass-producing cars at bargain prices.

The Seagull, BYD's cheapest electric car, was reduced to 69,800 yuan in March. At the current exchange rate, that would be about 13,375 Canadian dollars.

Even if you doubled that amount and rounded it up, $27,000 would be significantly cheaper than the cheapest electric vehicle currently available in Canada.

A CAA list of all electric vehicles currently for sale in Canada shows that only two are under $40,000 – the Fiat 500e and the Chevrolet Bolt LT. A handful of other vehicles cost between $40,000 and $50,000.

Of course, the European Union and the United States, both of which are trying to dramatically increase the adoption of electric vehicles, have closed the door to Chinese electric vehicles with high tariffs. Canada is considering doing the same.

Why? Fear of competition, of the destruction of local jobs and of the hidden costs associated with Chinese cars.

Does a BYD Seagull really cost $13,375? Or are these costs largely covered by massive subsidies from the Chinese government?

Is it really “cheap” if it is the product of a repressive regime that violates labor rights and allows environmental destruction as part of the automotive supply chain?

Would allowing Chinese cars give Canadians cheap electric cars for a few years, killing North American automakers, only to raise prices once automakers like Chevrolet, Toyota and Volkswagen come under pressure due to their lack of competitiveness?

On the other hand, China is far from the only culprit when it comes to government subsidies.

According to a report this year from the Parliamentary Budget Office, Canada's federal and provincial governments have invested more than $46 billion in electric vehicle, battery and supply chain production in Canada over the past five years.

In the short term, tariffs and subsidies are intended to give existing and new Western car companies time to catch up, improve their technology and lower prices. They could also be a lever to force China to improve its labor and environmental policies.

What we do not want, however, are long-term trade barriers, the support of our industry and several thousand jobs through enormous government funding, but also no cheap electric cars in an ever warmer earth.