Good morning, electric-vehicle enthusiasts and detractors alike. It’s mid-week and we’re right in the dog days of summer, but summer slowdowns and less-than-stellar first-half financial results for several car companies haven’t slowed down the news cycle. Profitability challenges and tariffs have only made things very complicated for car brands, and not just for the United States. So where does the EV industry go amid all this turmoil?
Welcome back to Critical Materials, the space to check some of the biggest daily stories in the industry and technology world. Today, we learn how Canada may inadvertently take the brunt of our breakup with EVs, while China comes on strong in Europe. Meanwhile, Volvo’s management gets a big shakeup—again.
30% If We Back Off EVs, Canada May Not Get Any
Canada may be physically large, but population-wise, it’s kind of a small country. It only has a little more in the way of citizenry than California does, for example.
Because of its lower population, it can be hard for most auto brands to make Canada-specific goods. But for a long time, that wasn’t so bad since Canadian and American tastes are so intertwined, as were the manufacturing and distribution of said models.
Now that tariffs and geopolitical tensions are growing between the U.S. and Canada, things aren’t so simple. And as the U.S. ends tax credit programs meant to spur both development and the purchase of electric vehicles, Canada could inadvertently catch some of the fallout.
Reporting from Automotive News Canada reveals just how dicey things could get:
A growing list of automakers have already curtailed their EV production ramp ups in North America, and overseas producers will need to reassess whether certifying EVs solely for the relatively small Canadian market is worth the cost, analysts said.
“It costs a lot of money to certify a vehicle to North American standards. And if you’re not going to sell it in the U.S., it’s a really hard business case to spend that money just for the Canadian market, said Andrew King, managing partner of DesRosiers Automotive Consultants.
“It does happen from time to time, but it’s more the exception than the rule.
Of course, Canada had its own EV credit for Canadians, which ended earlier this year. However, the Canadian government has expressed that it plans on restarting the credit soon.
But if auto manufacturers continue to stagger or kill off EV projects, what are Canadians to buy?
Tariffs make cross-border vehicles of any propulsion type less palatable. At the same time, the removal of tax credits and penalties for not meeting emissions targets gives manufacturers less incentive to actually build EVs.
Perhaps, this will only accelerate Canada’s desire to decouple itself from the U.S. and pivot elsewhere. Recently, there’s been serious talk of Canada aligning its safety, emissions, and crash standards with European markets, rather than the U.S., which would make the sale of smaller and cheaper EVs, like say, the Renault 5 E-Tech, a real possibility for Canadian drivers.
The piece says that one time, Canadians averaged purchasing about 70,000 plug-in cars per quarter, although that slowed down to around 40,000 after Canada’s EV credit program ended in January.
60% Chinese Cars Continue To Gain Steam In Europe
Car sales are down in Europe, some 4.4%. However, Chinese brands as a whole are up in Europe during the same time period. According to Reuters, all Chinese brands combined have taken up 5.1% of Europe’s market—just a hair behind Mercedes-Benz’s 5.2%:
Chinese brands nearly doubled their combined share of the European market to 5.1% in the first half of 2025, just shy of Mercedes-Benz's (MBGn.DE), opens new tab 5.2%, the report said.
Registrations of Chinese vehicles surged 91% since the start of the year. BYD (002594.SZ), opens new tab, Jaecoo, Omoda, Leapmotor and Xpeng (9868.HK), opens new tab were the five names fuelling the surge, with BYD alone registering 70,500 units in the first six months of 2025, a 311% jump from a year ago.
Stellantis (STLAM.MI), opens new tab saw the steepest market share decline among major automakers, to 15.3% from 16.7% a year earlier. The second biggest decline came from Tesla (TSLA.O), opens new tab, to 1.6% in the half-year period versus 2.4% last year.
It doesn’t take a genius to figure out why these brands are gaining traction in Europe. They’re offering reasonably-priced PHEV and EV driving, for prices that undercut European rivals. We’ve seen this already with the launch of the BYD Dolphin Surf, or Seagull as it’s known in its home market of China.
The Dolphin Surf’s roughly $22,000 base price and right-sized dimensions are perfect for European drivers. BYD isn’t the only one, either; budget offerings from Jaecoo (Chery) and Xpeng have also started to resonate in Europe.
By comparison, the updated Tesla Model Y isn’t lifting the brand’s sales numbers. Not in a way that matters yet, anyway.
90% Volvo Does Some Executive Reshuffling
It hasn’t been a great time for Volvo lately. The EX90 has been a hot ass software-related mess on the public market, whereas the EX30 has suffered from tariff-related woes that make it price-uncompetitive.
Still, it seems like Volvo is trying to right the ship via some new head honchos in its C-suite. Since April 1, Volvo has had a new CEO, Hakan Samuelsson. This week, Volvo's head of design, Jeremy Offer, has resigned after two years on the job. Interestingly, former Polestar CEO Thomas Ingenlath is back at Volvo, albeit in a different role.
From Automotive News:
Ingenlath, who started in June and reports to Geely Group Chairman Eric Li, will work on design-focused special projects at the company’s brands, which include Volvo, Polestar, Geely Auto, Zeekr, and Lynk & CO, a Geely spokesman said.
“Ingenlath has Volvo in his blood,” the insider said, adding that the German executive’s decades of design experience, which includes more than 12 year at Volkswagen Group, will be beneficial.
Samuelsson is also confident Ingenlath will be an asset.
“He has an excellent feel for what good design should look like going forward. He is also very experienced in seeing the connection between good design and what is possible from an engineering point of view,” Samuelsson told Automotive News Europe July 17.
Samuelsson added that Ingenlath will be “highly valued” by Volvo’s design team. “I think he will help them, coach them,” Samuelsson said.”
Former Volvo CEO Jim Rowan has also joined the board at Lotus, another Geely Group member.
Will these shuffles be enough to stave off what could be a rocky future at Volvo? We’ll just have to wait and see.
100% Should Canada Pivot To China?
It’s kind of insane to see just how much damage the Trump administration has done to a close ally. Canada’s car industry has been joined at the hip to the U.S., so many parts of our supply chain involve parts and vehicles moving freely between the two countries. Now, the tariff and annexation rhetoric spewed by the Trump administration has Canada’s leaders looking elsewhere.
Could that be China? Canada still has similar concerns about national security as the U.S. when it comes to Chinese tech, but that isn’t the end-all, be-all. Historically, Canada’s car market has hosted several Chinese-made vehicles, like some second-generation Honda Fits. Or, the Shanghai-made Tesla Model 3.
It’s soon to get the Kia EV5, which is a car explicitly designed and made in China. (Canada’s EV5s may be made in Singapore, but that has not been confirmed.)
Perhaps it is time for Chinese-branded Chinese cars to be sold in Canada?
Contact the author: Kevin.Williams@InsideEVs.com
