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Automotive

Trudeau’s new vehicle ban is a non starter

Published

6 months ago

5 minute read

From the Canadian Taxpayers Federation

Author: Kris Sims

The Trudeau government’s ban on new gas and diesel vehicles is a nonstarter for three powerful reasons.

First, Canadians want to drive gas-powered minivans and diesel pickups.

Second, Canada does not have the electrical power to fuel these battery-powered cars.

Third, Canadians do not have the money to build the power-generating stations that would be needed to power these government-mandated vehicles.

Let’s start on the showroom floor.

The Trudeau government is banning the sale of new gasoline and diesel-powered vehicles by 2035.

In about 10 years’ time, Canadians will not be allowed to buy a new vehicle powered by an internal combustion engine because the government will forbid it.

Canadians disagree with this.

The Canadian Taxpayers Federation released Leger polling showing 59 per cent of Canadians oppose the federal government’s ban on new gas and diesel vehicles.

Among those who are decided on the issue, 67 per cent of Canadians, and majorities in every demographic, oppose the Trudeau government’s ban.

Now let’s look under the hood.

Canada does not have the electricity to charge these battery-powered cars. The government hasn’t presented any plan to pay for the power plants, transmission lines and charging stations for these government-mandated vehicles.

That leaves a big question: How much will this cost taxpayers?

Canada’s vehicle transition could cost up to $300 billion by 2040 to expand the electrical grid, according to a report for Natural Resources Canada.

Let’s look at why this will cost so much.

The average Canadian household uses about 10,861 kWh in electricity per year. The average electric car uses about 4,500 kWh of energy per year.

The average household’s electricity use would jump by about 40 per cent if they bought one EV and charged it at home.

Canada is home to 24 million cars and light trucks that run on gasoline and diesel, according to Statistics Canada.

If all those vehicles were powered by electricity and batteries, that fleet would use about 108 million mWh of power every year.

For context, one large CANDU nuclear reactor at the Darlington nuclear plant in Ontario generates about 7,750,000 mWh of power per year.

Canada would require about 14 of these reactors to power all of those electric cars.

Building a large nuclear reactor costs about $12.5 billion.

That’s a price tag of about $175 billion just for all the power plants. The Natural Resources report estimates the transition to electric vehicles could cost up to $300 billion in total, when new charging stations and power lines are included.

Who would be paying that tab? Normal Canadians through higher taxes and power bills.

Canadians cannot afford the cost of these mandatory electric vehicles because they’re broke.

Canadians are broke largely because of high taxes and high inflation, both driven by the Trudeau government’s wasteful spending.

About half of Canadians say they are within $200 of not being able to make the minimum payments on their bills each month. That’s also known as barely scraping by.

Food banks are facing record demand, with a sharp increase in working families needing help. That means parents who are holding down jobs are still depending on donated jars of peanut butter to feed their kids.

Rubbing salt into the wound, the federal government also put taxpayers on the hook for about $30 billion to multinational corporations like Honda, Volkswagen, Stellantis and Northvolt to build EV battery factories.

The roadside sobriety test is complete, and the Trudeau government is blowing a fail on this policy.

Canadians are opposed to the Trudeau government banning the sale of new gasoline and diesel-powered vehicles.

Canada does not have the electricity to charge these battery-powered cars.

Canadians don’t have the money to build the new power plants, transmission lines and charging stations these vehicles would demand.

It’s time to tow this ban on new gas and diesel vehicles to the scrapyard.

Franco Terrazzano is the Federal Director and Kris Sims is the Alberta Director of the Canadian Taxpayers Federation

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Automotive

Trump warns U.S. automakers: Do not raise prices in response to tariffs

Published on March 29, 2025

By

MXM logo MxM News

Quick Hit:

Former President Donald Trump warned automakers not to raise car prices in response to newly imposed tariffs, arguing that the move would ultimately benefit the industry by strengthening American manufacturing. However, automakers are signaling that price increases may be unavoidable.

Key Details:

  • Trump told auto executives on a recent call that his administration would look unfavorably on price hikes due to tariffs.
  • A 25% tariff on imported vehicles and parts is set to take effect on April 2, likely driving up costs for U.S. automakers.
  • Industry analysts predict vehicle prices could rise 11% to 12% in response, despite Trump’s insistence that tariffs will benefit American manufacturing.

Diving Deeper:

In a conference call with leading automakers earlier this month, former President Donald Trump issued a stern warning: do not use his new tariffs as an excuse to raise car prices. While Trump presented the tariffs as a boon for American manufacturing, industry leaders remain unconvinced, arguing that the financial burden will inevitably lead to higher costs for consumers.

Trump’s administration is pressing ahead with a 25% tariff on all imported vehicles and parts, set to take effect on April 2. The move is aimed at reshaping trade dynamics in the auto industry, encouraging domestic manufacturing, and reversing what Trump calls the damaging effects of President Joe Biden’s electric vehicle mandates. Despite this, automakers say that rising costs on foreign parts—which many depend on—will leave them little choice but to pass expenses onto consumers.

“You’re going to see prices going down, but going to go down specifically because they’re going to buy what we’re doing, incentivizing companies to—and even countries—companies to come into America,” Trump stated at a recent event, reinforcing his stance that the tariffs will ultimately lower costs in the long run.

However, industry insiders are pushing back, warning that a rapid shift to domestic production is unrealistic. “Tariffs, at any level, cannot be offset or absorbed,” said Ray Scott, CEO of Lear, a major automotive parts supplier. His concern reflects broader anxieties within the industry, as automakers calculate the financial strain of the tariffs. Analysts at Morgan Stanley estimate that vehicle prices could increase between 11% and 12% in the coming months as the new tariffs take effect.

Automakers have been bracing for the fallout. Detroit’s major manufacturers and industry suppliers have voiced their concerns, emphasizing that transitioning supply chains and manufacturing operations back to the U.S. will take years. Meanwhile, auto retailers have stocked up on inventory, temporarily shielding consumers from price hikes. But once that supply runs low—likely by May—the full impact of the tariffs could hit.

Within the Trump administration, inflation remains a pressing concern, though Trump himself rarely discusses it publicly. His economic team is aware of the potential for tariffs to drive up costs, yet the administration’s stance remains firm: automakers must adapt without raising prices. It remains unclear, however, what actions Trump might take should automakers defy his warning.

The auto industry isn’t alone in its concerns. Executives across multiple sectors, from oil and gas to food manufacturing, have been lobbying against major tariffs, arguing that they will inevitably result in higher prices for American consumers. While Trump has largely dismissed these warnings, some analysts suggest that public dissatisfaction with rising costs played a key role in shaping the outcome of the 2024 election.

With the tariffs set to take effect in just weeks, automakers are left grappling with a difficult reality: absorb billions in new costs or risk the ire of a White House determined to remake America’s trade policies.

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Automotive

Trump announces 25% tariff on foreign automobiles as reciprocal tariffs loom

Published on March 26, 2025

By

From The Center Square

By 

President Donald Trump announced a permanent 25% tariff on automobiles made in other countries that will go into effect on April 2.

Trump made the announcement Wednesday in the Oval Office. He also hinted that the reciprocal tariffs he plans to announce on April 2 could be more lenient, suggesting the tariffs would be less than fully reciprocal.

“What we’re going to be doing is a 25% tariff on all cars not made in the U.S.,” the president said.

Asked if any changes could avert the auto tariffs, Trump said they would be “permanent.”

“This will continue to spur growth like you haven’t seen before,” Trump said.

Trump said the tariffs will be good news for auto companies that already build products in the U.S. He also said carmakers that don’t build in the U.S. are looking to do so.

“We’re signing an executive order today that’s going to lead to tremendous growth in the automobile industry,” Trump said.

The White House said it expects the auto tariffs on cars and light-duty trucks will generate up to $100 billion in federal revenue. Trump said eventually he hopes to bring in $600 billion to $1 trillion in tariff revenue in the next year or two.

Trump also said the tariffs would lead to a manufacturing boom in the U.S., with auto companies building new plants, expanding existing plants and adding jobs.

Trump also urged House Speaker Mike Johnson to approve a measure that would allow car buyers to deduct the interest on loans for cars that are made in America. Trump said that such a plan would make cars nearly free for buyers.

“So when you get a loan to buy a car … I think it’s going to pay for itself, I don’t think there’s any cost,” he said.

Trump also said the reciprocal tariffs he plans to unveil on April 2 would be fair.

“We’re going to be very nice actually,” he said. “It’ll be, in many cases, less than the tariff they’ve been charging us for decades.”

European Commission President Ursula von der Leyen said tariffs would hurt businesses and consumers.

“I deeply regret the U.S. decision to impose tariffs on European automotive exports,” she said. “Tariffs are taxes – bad for businesses, worse for consumers, in the U.S. and the EU.”

Business groups, including the U.S. Chamber of Commerce and American Farm Bureau Federation, have urged Trump to back off tariff threats.

Trump has promised that his tariffs would shift the tax burden away from Americans and onto foreign countries, but tariffs are generally paid by the people who import the products. Those importers then have a choice: absorb the loss or pass it on to consumers through higher prices. He also promised tariffs would make America “rich as hell.” Trump has also used tariffs as a negotiating tactic to tighten border security.

Tariffs are taxes charged on imported products. The company importing the products pays the tariffs and can either try to absorb the loss or pass the additional costs on to consumers.

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