Numbers. I love ’em. Driving loves them. And more importantly — because they just made for one of the most interesting episodes of Driving into the Future yet — Tim Cain, Joe McCabe, and Scott MacKenzie love them, too.
Cain, McCabe, and MacKenzie were guests on our latest expert panel, and spent an hour predicting, based on the numbers they saw in the last 12 months, the impact that Trump’s tariffs, the loss of EV incentives, and the possible dumping of EV mandates are going to have on Canada’s auto industry and your next car purchase.
So, without further ado, here are the numbers you really need to pay attention to if you’re a consumer shopping a new car; a car executive trying to plan for the next few months of volatility; or just a Canadian citizen, wondering if, as America’s newly-elected 47th president seems to be promising, our economy is about to go into a tailspin.
$10,000
That’s how much money Cain says Volkswagen is putting on the hoods of 2024 ID.4 EVs. According to the founder of GoodCarBadCar and Driving’s own data analyst, after the federal government abruptly announced last week it was suspending its iZEV rebates because they ran out of money, Volkswagen announced it would, at least temporarily, match the $5,000 the Liberals were cancelling. Good on Volkswagen, as well as Nissan, Kia, Hyundai, General Motors, and all the other automakers stepping to the breech.
However, what Volkswagen Canada was probably less happy to proclaim so loudly is that it was already offering $5,000 on its leftover 2024 ID.4s because, well, like so many EVs these days, they’re simply not selling as well as EV proponents promised. In fact, besides that $10,000-in-total rebate, VW was also offering up to 60 months financing at 0%.
Not since 2016 and 2017 — when Ford was chasing the pickup crown — has so much incentive money been thrown at a mid-priced vehicle in Canada. And there’s a big difference in leveraging that much for an F-150, which has huge profit margins built into it; the ID.4, like all electric vehicles, most definitely doesn’t have $10,000 to give.
No need to hurry, if you’re worried there’ll be a sudden rush on EVs; there are lots of 2024 ID.4s hanging about, one dealer having at least 37 on his lot as we went to press.
And just so you know, I am not picking up on Volkswagen — though I’ve got a funny feeling I can expect some remedial P.R. once this article is published — Audi dealers have been sitting on boatloads of e-trons, Mercedes dealers have a bunch of unloved EQs, and Ford had to cease production of its F-150 Lightning for a spell because dealers couldn’t sell ’em. With rare exception, there are no battery-powered vehicles hitting the numbers that automakers and EV proponents so loudly promised a year ago.
4.4%
That’s the market share the pure battery-electrics now command in Canadian provinces not named “Quebec” or “British Columbia.” Yes, I know you’ve read that zero-emissions vehicles made up 13.5% of all the cars sold in Canada last year. But that number also includes PHEVs. If you dug down deeper, you might have also seen that BEVs alone accounted for 10% of all the cars sold in Canada. Both numbers were loudly trumpeted by those claiming the EV revolution is already here.
Not nearly so proudly publicized is that, outside La Belle Province and the Left Coast, only 4.4% of new cars sold were battery-electric. Yup, fewer than one in 20. And that’s before the $5,000 federal subsidy was paused (if you hadn’t read, it’s unlikely to return).
The numbers are skewed most dramatically by La Belle Province, which saw a huge surge in the last six months in demand because its incentives — $7,000 if you bought an EV before December 31, 2024 — were reduced to $4,000 as of the new year. As a result, Quebec sold more BEVs (74,913) than the rest of Canada combined (65,395). Maybe there is an EV revolution happening in Quebec — or maybe les habitants just like government money — but the rest of Canada ain’t seeing it.
It’s also worth noting the same market distortions are happening south of the border, though to a lesser degree. Using some numbers that McCabe, AutoForecast Solutions‘ president and CEO, provided, it turns out that, if you strip out Californian BEVs from American sales, the rest of the U.S.’s market share is 6.2%, which is — and this can’t be a coincidence — exactly the same as Canada if you strip out only Quebec, by far Canada’s most prolific EV-buying province.
So, if you’re looking for that elusive “natural” market share of BEVs — i.e. how many fully battery-powered vehicles would be sold if there were no provincial or state incentives or mandates — the data says somewhere between 4% and 6% would be a good guess.
43%
That’s the percentage of all of Tesla’s automotive profits that came from the sale of regulatory credits in the first nine months of 2024. In fact, Tesla banks more than $2 billion in regulatory credits per year these days, and has amassed no less than $10 billion since these credits were introduced.
What are regulatory credits, you ask?
As part of the regulatory control baked into the California Air Resources Board’s ZEV rules, automakers must sell a certain quota of plug-in electrics. That quota is measured in regulatory credits. If you don’t garner enough regulatory credits — hit your quota by selling enough EVs, in other words — you have to buy them from another company with an excess of credits. A company like Tesla, of course, has a huge excess, since it markets nothing but battery-powered vehicles, so it sells its credits to legacy automakers that have fallen short of their quotas.
And, yes, if you’re an amateur actuary, you’ve probably figured out how these credits are doubly beneficial to Tesla. First, every cent the company receives from these credits is pure profit; there’s no input cost at all. Better yet, all those billions Tesla is collecting come straight from another automaker’s bottom line. So not only do these billions in regulatory credits allow Tesla to price its products lower, but they raise the price of legacy automakers’ cars.
The issue now is that, as Driving into the Future discussed, Donald Trump wants to be rid of all EV mandates, be they de facto restrictions that result from the Environmental Protection Agency’s tight emissions standards; or California’s unique right to regulate ICE sales. If the 47th succeeds — and, though doable, rescinding California’s “waiver” to set its own emissions standards is going to be a long haul — it’s very likely that all that money dries up.
So, yes, all you Elon fans, Tesla’s CEO does indeed boast loudly that his company doesn’t need EV subsidies any more. But, rest assured, you will never hear him calling for the end of mandates!
533,566
According to MacKenzie, that’s the number of cars Toyota Canada produced last year at its two plants in Cambridge and Woodstock, Ontario. That includes Canada’s hottest-selling non-pickup, the RAV4; as well as the Lexus NX and RX, all in hybrid as well as gas form. That makes Toyota, in case you’re wondering, the number-one automobile manufacturer in Canada. Yes, ahead of Ford, General Motors, and Stellantis.
Now here’s the number that should really amaze, delight, or — depending on which side of the Trump-tariff divide you reside on — terrify you: more than four-fifths of those cars are destined for American consumption. Actually, says Toyota Canada’s Director of Corporate and External Affairs, depending on the mix, the prevailing exchange rate, and market conditions, it could be as high as 85%.
Trump, of course, says he wants to stop cars — and anything else, for that matter — crossing the border. Actually, what he really wants is Toyota — as well as any other company that manufactures cars in the Great White Frozen North — to abandon its Canuckian assembly plants and move them lock, stock, and barrel to MAGA-land. Hence the threat of tariffs that, at last word, could arrive anytime between February 1 and April 1.
Many presume this just to be a negotiating tactic, especially optimists looking to predict that any such tariffs will be short-lived. Indeed, most pundits take pains to point out that any tariffs levied on Canadian imports will also increase prices to American consumers which, according to the prevailing logic, will cause great pain to his supporters; force him to reflect (yes, I actually wrote that!) on his excesses; and eventually get him to reconsider his actions. It’s the classic analysis of such levies, namely that they punish tariff-er and tariff-ee alike.
Except that one of Trump’s economic advisers, Stephen Miran, is whispering into The Donald’s ear that tariffs, done right, will be paid by the tariffed country — that’s us — and won’t raise prices in America at all. In a paper called A User’s Guide to Restructuring the Global Trading System, the Hudson Bay Capital senior strategist explains how, if universal tariffs are imposed — be they 10% or 25% — correctly, the result will be a commensurate drop in the USD-CAD exchange rate.
In other words, the cost when one of those RAV4s — or any Canadian-built car — crosses the border will be exactly the same as it was before the tariffs. Indeed, read the fine print and Miran’s plan promises no effect on America car prices, but would leave our auto industry in virtual ruin.
Miran cites Trump’s tariffing of China in his first term as proof: “The [American] dollar rose by almost the same amount as the effective tariff rate, nullifying much of the macroeconomic impact” on America. But, says the strategist, “because Chinese consumers’ purchasing power declined with their weakening currency, China effectively paid for the tariff revenue.”
If you’ve been listening carefully, that sounds pretty much like Trump’s Holy Grail.
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