The must-read morning roundup of EV and tech news.<\/p>\n
Welcome back to Critical Materials<\/a>, our morning roundup of auto industry and technology news. We’ll be diving more into the China trade deal today, along with why it’s good news for Tesla, and why this debate is caught up in the ongoing affordability crisis. Let’s dig in.\u00a0<\/p>\n 25%:\u00a0Canada\u2019s EV Tariff Deal With China Puts The U.S., Auto Industry On Alert<\/p>\n Geely and Zeekr at CES 2026<\/p>\n Photo by: Patrick George<\/p>\n As we reported on Friday,\u00a0the China-Canada deal is small for now\u2014it\u2019s capped at 49,000 cars for its first year, with expansion to 70,000 within five years. But it\u2019s a start (or rather a restart, since it returns Canada to its pre-2023 tariff deal) to something potentially big: the growing expansion of Chinese EVs into North America. And as\u00a0Canadian Prime Minister\u00a0Mark Carney\u00a0explicitly said, most of these imports will cost under $25,000 U.S. (about $35,000 CAD).<\/p>\n Naturally, not everyone is happy about what could be a threat to automotive jobs in North America.\u00a0Sen. Brian Schatz, D-Hawaii, blamed the Trump administration\u2019s strained relations with Canada, reports\u00a0The Hill<\/a>:<\/p>\n \u201cWe just got absolutely rolled in this Canada \u2013 China deal. A stark foreign policy failure with domestic economic consequences,\u201d Schatz\u00a0wrote in a post\u00a0on social platform X.\u00a0<\/p>\n \u201cThe most basic principle in politics and geopolitics is loyalty to friends. And we weren\u2019t just disloyal \u2013 we were hostile. So here we are,\u201d he added.<\/p>\n President Donald Trump, for his part, appeared to give the deal a thumbs-up: \u201cIf you can get a deal with China, you should do that,\u201d Trump told reporters. Other U.S. economic officials said Canada will ultimately regret the deal.<\/p>\n My colleague\u00a0Kevin Williams\u00a0has a good story about what\u2019s at stake<\/a>, and why leaders in the auto-producing parts of Canada are especially unhappy about the deal. And it brings plenty of concern among U.S. auto industry observers as well. From the\u00a0Associated Press<\/a>:<\/p>\n Chinese automakers will have to meet standards required for the Canadian auto market for the latest trade arrangement to be successful\u2014standards that are similar to those in the U.S.\u2014which is likely to incentivize Chinese auto manufacturing investment in Canada.<\/p>\n They\u2019ll also have to establish which segment of the market they are targeting there: Higher-end vehicles, or less-expensive ones that sell at higher volumes.<\/p>\n Regardless, \u201cIt brings it home to what is needed to compete globally,\u201d said Mark Wakefield, global automotive market lead at AlixPartners. The firm predicts Chinese brands will account for 30% of the global market by 2030.<\/p>\n \u201cThey\u2019ve already started in Europe. They started in South America. Now Mexico and Canada,\u201d Wakefield said. American carmakers \u201cdon\u2019t want to end up as a Brazil with your ethanol-based cars that aren\u2019t sellable anywhere else in the world and … like Britain or Australia that used to matter in the auto world, and no longer really matter.\u201d<\/p>\n Emphasis mine above, because that is indeed a scary outcome for the U.S. auto industry.<\/p>\n Then again, if it brings more affordable hybrid and zero-emission options to North America\u2014and the way things are potentially going, the U.S. included\u2014and is that such a bad thing? Ultimately, North Americans will have to make a choice: affordability or loyalty to local production.<\/p>\n Unless, of course, our automakers can meet people halfway and\u00a0get that $50,000 average new car price\u00a0down considerably.<\/p>\n 50%:\u00a0The Canada-China Trade Deal Is Good News For Tesla<\/p>\n 2026 Tesla Model 3 Standard<\/p>\n Photo by: Tesla<\/p>\n Tesla\u00a0had a bad year in Canada in 2025, with sales dropping nearly 64%<\/a> amid the U.S. trade war and\u00a0CEO Elon Musk\u2019s\u00a0multiple controversies. But the China trade deal could be good news for the electric automaker: it builds a ton of cars in China, including ones it exports to Canada (unlike the U.S.) While many Chinese automakers will be keen to seize the opportunity as they expand exports, Tesla has an advantage as it in 2023 already equipped its Shanghai plant, its biggest and most cost-efficient factory globally, to build and export a Canada-specific version of its Model Y.<\/p>\n The U.S. automaker had that same year started shipping the car from Shanghai to Canada, boosting Canadian imports of automobiles from China to its largest port, Vancouver, by\u00a0460% year over year\u00a0to 44,356 in 2023.<\/p>\n But it was forced to stop in 2024 and switched to shipping from its U.S. and Berlin factories after Ottawa imposed 100% tariffs, citing a wish to counter what they called China’s intentional state-directed policy of overcapacity.<\/p>\n “This new agreement could allow resumption of those exports rather quickly,” said Sam Fiorani, vice president of research firm AutoForecast Solutions.<\/p>\n Now, to see if Canadians actually line up to buy those cars.<\/p>\n 75%:\u00a0Affordability Anxiety Will Define 2026\u2019s Car Market<\/p>\n Photo by: Patrick George<\/p>\n But all of this, I\u2019d argue, isn\u2019t even a technology issue or a geopolitical one: it\u2019s an affordability issue. The appeal of Chinese imports is that\u00a0they\u2019re good and they\u2019re cheap\u2014a combination that feels in short supply in the North American car market.<\/p>\n According to\u00a0Automotive News<\/a>, affordability anxiety was the overwhelming vibe at the 2026 Detroit Auto Show. And while carmakers may breathe a sigh of relief that they\u2019re no longer under a regulatory gun to make tons of EVs now that fuel economy requirements have been eased, they can\u2019t lean on super-expensive gas trucks to save the day like they used to:<\/p>\n \u201cWhat\u2019s holding the market back is certainly affordability and really the lack of low-priced vehicles,\u201d said Michael Robinet, executive director of automotive consulting at S&P Global Mobility. \u201cNot only in the United States, but around the world, this is a problem.\u201d<\/p>\n Sen. Bernie Moreno, a former car dealer and member of the committee working to reschedule testimony from the Detroit 3 CEOs, said the Trump administration is easing regulations to help bring down vehicle costs and that automakers also have a role to play. The government is rolling back emissions standards and in September eliminated a $7,500 tax credit that had greatly fueled EV demand.<\/p>\n It now takes about 36 weeks of median income to buy an average new vehicle, according to Cox Automotive data. That\u2019s down from 42 weeks three years ago but not necessarily a sign affordability has significantly improved, Cox Executive Analyst Erin Keating said.<\/p>\n \u201cEven with affordable vehicles out there, fewer buyers are buying. The consensus is that this shift isn\u2019t temporary. … That\u2019s one reason dealer sentiment reflects concern. The missing customers aren\u2019t sidelined. They\u2019re essentially excluded.\u201d<\/p>\n So how do they plan to meet the moment? According to that story,\u00a0Jeep\u00a0and\u00a0Ram\u00a0parent company\u00a0Stellantis\u00a0is preparing more models priced under $40,000 and even $30,000 (though I\u2019ll believe the latter when I see it) and even\u00a0Ford\u00a0said it might consider making sedans again after canceling all of them in 2020.<\/p>\n One bright spot for EV fans:\u00a0the falling costs of batteries<\/a>\u00a0should make electric power more affordable. But clearly, the demand is there for new cars that won\u2019t break the bank. And if the familiar automakers won\u2019t deliver, it seems\u00a0China Inc. is ready to.<\/p>\n 100%: How Much Does It Matter To You Where Your Car Is Made?<\/p>\n Photo by: Zeekr<\/p>\n I have owned Toyotas made in the United States, a Chevrolet and a Mazda made in Mexico, and a Kia made in South Korea (that’s now made in\u00a0Georgia instead), among other things. I can’t say that production origin means all that much to me in a globalized world.<\/p>\n So is that a priority for you when you buy a car? Sound off in the comments.\u00a0<\/p>\n Contact the author: patrick.george@insideevs.com<\/a><\/p>\n \n \t\tWe want your opinion!\n\t<\/p>\n What would you like to see on Insideevs.com?<\/p>\n![\"Geely](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2025\/08\/16x9-tr.png\")
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And now, those just got a whole lot cheaper, potentially. Here\u2019s\u00a0Reuters<\/a>\u00a0with more:<\/p>\n<\/p>\n<\/p>\n