The must-read auto and tech briefing, every weekday.<\/p>\n
Welcome back to Critical Materials<\/a>, your daily roundup for all things electric and tech in the automotive space. Also on deck: AI data centers are expected to fuel the next chip shortage and BYD plans to sell even more cars outside of China. Let’s jump in.<\/p>\n 25%: Cheap Chinese EVs Present A ‘Slippery Slope,’ Says GM CEO<\/p>\n Photo by: Patrick George<\/p>\n Canada’s recent deal to let in an allotment of up to 49,000 Chinese-built EVs each year is, according to\u00a0General Motors Chief Executive Mary Barra, a risk to North American auto manufacturing.<\/p>\n The deal will reduce the effective tariff rate of the imported vehicles from a prohibitive 100% down to a much more palatable 6.1%. This might\u00a0seem like a tidal wave on the U.S. auto industry’s imports to Canada, but in reality, it represents just 3% of Canada’s total annual vehicle sales.<\/p>\n Still, Barra insists that the move is shortsighted and could lead to much bigger threats to established players. Here’s an exclusive from\u00a0the Wall Street Journal<\/a>:<\/p>\n Barra said Canada\u2019s China deal,\u00a0announced earlier this month, is counter to building a strong North American industrial base and to protecting jobs and national security on the continent.<\/p>\n \u201cI can\u2019t explain why the decision was made in Canada,\u201d Barra said during an all-hands meeting with employees Tuesday. \u201cIt becomes a very slippery slope.\u201d<\/p>\n She noted that Chinese automakers benefit in China from high tariffs imposed on importers and on technology restrictions that\u00a0prevent other players\u00a0from entering their market.<\/p>\n By the end of the decade, at least half of the EVs imported would be required to have a price of $35,000 Canadian dollars, equivalent to roughly $26,000, Prime Minister Mark Carney\u2019s office said. Canada will work with Chinese auto manufacturers on timely vehicle certifications to ensure they meet the country\u2019s motor-vehicle safety standards.<\/p>\n While Barra didn’t say this out loud, it’s clear that the value proposition represented by Chinese automakers is a big part of these warnings from across the industry.<\/p>\n Carney’s pricing goals squarely target the affordable end of the market, which American automakers aren’t exactly dominating today. But at least one critic hit back at Barra from\u00a0Automotive News Canada<\/a>,\u00a0saying this is at least a partially self-inflicted wound because GM has been winding down so many investments in the Canadian auto sector as of late:<\/p>\n It\u2019s not lost on me\u2014or likely the thousands of GM Canada employees\u2014that she made the comments three months after GM killed the BrightDrop EV commercial van line, which led to the idling of the GM CAMI plant in Ingersoll, Ont. And the comments came just three days before the automaker ends the midnight shift at its Oshawa Assembly Plant.<\/p>\n And still, she just \u201ccan\u2019t explain why\u201d Canada would look for investment elsewhere\u2014even if elsewhere is China? It\u2019s because there\u2019s been no investment from General Motors of late. Indeed, GM has steadily eroded its manufacturing footprint in Canada, shuttering plants over the last several years.<\/p>\n None of GM\u2019s decisions seems geared toward building a strong North American industrial base. They aren\u2019t actions taken when protecting jobs, are they?<\/p>\n Meanwhile, Canada will also work to ensure that these vehicles meet the country’s safety standards, which are aligned with U.S. safety standards. This means that in many cases, cars sold in Canada could easily cross into the U.S.\u2014especially when they’re also selling like crazy in Mexico. One way or another, it feels like the dominoes are starting to fall here.<\/p>\n 50%: EVs Are Getting More Expensive To Build. Blame AI Data Centers<\/p>\n Photo by: InsideEVs<\/p>\n Just when you thought that the COVID-era chip shortage was a thing of the past, the auto industry has a new enemy: giant, humming AI data centers.<\/p>\n Now, as much as cars are becoming more like computers on wheels, Silicon Valley doesn’t care about your new crossover or even software-defined vehicles. They want the memory chips that help to power the electronics inside these new tech-heavy cars. With the AI boom, tech giants want as much as they can grab (even if they aren’t going to use it<\/a>)\u2014and they’re willing to pay a\u00a0lot more than car companies for it.<\/p>\n S&P Global<\/a>\u00a0explains it in a report:<\/p>\n The chip shortage resurfaced in late 2025, this time centered on dynamic random-access memory (DRAM) memory chips, as soaring AI data center demand outstripped supply.<\/p>\n Automotive clients, unable to match the profit margins offered by data center buyers, faced steep price hikes and the looming need to redesign vehicle electronics around newer memory technologies by 2028.<\/p>\n Supply chain security concerns have extended to rare earth materials, which are essential for electric motors, with mainland China\u2019s dominance prompting a search for alternative sources and technologies<\/p>\n Car companies aren’t even using the most cutting-edge memory, either. Cars generally rely on older, slower memory technology, however. That means the manufacturing capacity of even the largest chip companies is becoming overwhelmed to meet the demand of AI customers with virtually unlimited funds seeking more advanced hardware.<\/p>\n Analysts believe that this could begin to affect vehicle output by the second quarter of 2026. That doesn’t mean that car production will come to a grinding halt. But if you look back to the last big semiconductor crunch, it could spell another major shortage on all automotive fronts.<\/p>\n 75%: BYD Plans A Huge Uptick In Foreign Sales This Year<\/p>\n Photo by: BYD<\/p>\n Chinese auto giant BYD has been doing numbers lately<\/a>. In China, the brand has been well-received, though an industry-wide slump (which is the result of\u00a0addressing a much larger problem<\/a>) means an expected dip at home.<\/p>\n To make up for that slump, BYD\u00a0says that it expects to expand its sales outside of China by nearly 25% this year. And that all starts with Europe<\/a>.\u00a0The South China Morning Post<\/a>\u00a0tells all:<\/p>\n The Shenzhen-based company, the world\u2019s largest builder of pure electric and plug-in hybrid vehicles, expected to sell 1.3 million cars this year outside mainland China, up 24.3 per cent from 2025, said Li Yunfei, general manager of branding and public relations, in a media briefing on Saturday.<\/p>\n \u201cWe will launch more new models in some lucrative markets, which will include our Denza-branded vehicles,\u201d he said. \u201cOur network of dealers will be further expanded.\u201d<\/p>\n Believe it or not, this is actually a reduction of what BYD had originally planned.<\/p>\n According to Bloomberg data, Citigroup previously said that BYD told investors that it planned to sell between 1.5 and 1.6 million units outside of China back in November. It’s not clear what caused BYD to revise that number, especially as news that Canada will be opening its doors to Chinese-built cars.<\/p>\n So now BYD has its sights set on doubling its dealer network in Europe. The writing on the walls doesn’t look great for legacy automakers, even if some aren’t as worried as others<\/a>.<\/p>\n 100%: Would You Buy A Cheap Chinese EV?<\/p>\n Photo by: Xiaomi<\/p>\n Chinese EVs are both good\u00a0and cheap. It’s the reason that many legacy Western automakers have had to sell their experience<\/a> rather than the latest tech. So now that America is being squeezed on virtually all sides by Chinese car companies, the very real “existential threat<\/a>,” as Ford’s CEO calls it.<\/p>\n Are you ready? More importantly, are you willing to buy one?<\/p>\n \n \t\tWe want your opinion!\n\t<\/p>\n What would you like to see on Insideevs.com?<\/p>\n![\"GM](\"https:\/\/www.newsbeep.com\/ca\/wp-content\/uploads\/2026\/01\/16x9-tr.png\")
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