Nissan Canada could potentially import electric and plug-in hybrid vehicles produced by its Chinese joint venture, Dongfeng Nissan, to expand its domestic lineup. At least, the company says it is mulling the idea.
However, executives at the automaker’s Canadian division stressed during a round table discussion with media this week that regulatory uncertainty surrounding Ottawa’s import quotas are proving a hindrance to moving forward with any such plans.
The Canada-China deal
Canada recently adjusted its trade framework to allow up to 49,000 Chinese-built electrified vehicles to enter the country annually under a reduced 6.1 percent Most-Favoured-Nation tariff, replacing a previous 100-percent surtax. Ottawa currently operates this quota on a first-come, first-served basis. The government has set aside 24,500 units for the second half of the year, alongside any unused volume from the preceding six months.
The cost of certification
Nissan Canada President Steve Rhind confirmed that leveraging China as a manufacturing base for Canadian-bound EVs remains under serious consideration. The challenge lies in the significant cost of getting models homologated so they can be sold here and driven on Canadian roads.
That’s in contrast with Tesla, say, which can import Model 3s from China without having to spend on homologating them, since the Model 3 is already certified for Canada. Polestar and Lincoln are similarly already bringing in vehicles Made in China.
Nissan would need to modify and certify Dongfeng Nissan products to meet Canadian Motor Vehicle Safety Standards. And spending heavily to homologate a new Chinese-built EV carries significant financial risk without a guaranteed quota allocation. The automaker fears reaching the end of the certification process only to find the reduced-tariff quota fully claimed, triggering the base 100-percent tariff on its shipments.
Nissan is thus lobbying the Canadian government to establish a clearer quota attribution system among individual manufacturers.
Expanding its EV lineup with lower-cost Chinese production aligns closely with Nissan’s goals in the region. Right now, gas-engine vehicles continue to make up the large majority of Nissan’s sales in Canada, but electric vehicles are accounting for some 9 percent of the brand's sales here; the company sees obvious room for growth if it can expand its model lineup.
Introducing affordable options like the new entry-level LEAF S will help with that expansion, but more is needed. Importing models from Dongfeng Nissan could offer an efficient path to scale its zero-emission portfolio. If Ottawa is able to provide assurances that Nissan will benefit from a sufficient quota allocation, we may just start to see all-new Nissan badged-EVs at dealers here.