China’s Low-Cost EVs Come at the Expense of Canada’s National Security: Experts

Canada faces a growing challenge as connected Chinese electric vehicles are set to pour into the market, merging trade tensions with serious threats to national security infrastructure, experts say.

Low-cost Chinese electric vehicles (EVs) are gaining ground in some Western markets, offering budget-conscious consumers a cheaper option for transportation, but the attractive price may come with significant national security risks, according to a panel hosted this week by the Macdonald-Laurier Institute.

The Ottawa-based think tank hosted “Cheap cars, high costs: The security reality of China’s EVs,” a 90-minute discussion with industry and policy experts on the potential fallout from Canada’s EV deal with China.

The panel discussion comes as Ottawa has abandoned its 100 percent surtax on Chinese-made EVs introduced in 2024 in lockstep with Washington.

McCuaig-Johnston also cited the Vehicles-to-Grid Integration Assessment Report published by the U.S. Department of Energy (DOE) in January 2025, which warns that vehicle-grid integration systems are vulnerable to cybersecurity threats.

She argued that China could use software vulnerabilities found in its EV operating systems to trigger a synchronized, malicious power surge from charging vehicles to destabilize the power grid and cause widespread “brownouts” in North America. A brownout is a temporary drop in voltage in an electrical power system.

Kill switches were another concern discussed by McCuaig-Johnston and Professor Brenda Shaffer, a research faculty member at the U.S. Naval Postgraduate School and an energy security expert.

Both speakers warned that embedded software “kill switches” could be remotely activated to abruptly stall vehicles, paralyzing transit systems and gridlocking major metropolitan corridors during a geopolitical or foreign policy crisis.

“These kinds of threats—they’re not theoretical. They’re not just hyperbole,” Shaffer said. “There are actually laboratories that are discovering these different kill switches and remote controls.”

McCuaig-Johnston said Canadians should be aware that such threats could potentially be used against anyone who opts for a Chinese EV because of its lower price tag.

“One could ask, is this a threat to an average Canadian that might be thinking of buying a Chinese EV?” she said. “They may assess that their privacy... isn’t as important to them as the price of the car.”

She noted that sensitive information shared in ordinary conversations could also be collected—spouses discussing banking details, for instance. She said “it’s naive to think” China wouldn’t leverage this type of data.

Shaffer voiced similar concerns, pointing to the UK Ministry of Defence’s decision to place warning stickers inside EVs linked to Chinese manufacturers or supply chains over concerns about espionage and data transmission.

Kingston argued that Canada can’t afford to be out of step with the United States on trade and regulatory policy regarding Chinese EVs. The U.S. has maintained a 100 percent Section 301 tariff on Chinese EVs and adopted separate national-security restrictions on connected-vehicle technology. Washington has also been critical of Ottawa dropping its tariffs on Chinese EVs, expressing concern that it could also compromise the North American market.

Despite the ongoing trade tensions between Ottawa and Washington, Kingston said, a deal is in the interest of both countries because American sends more vehicles to Canada “than any other export market in the world.”

“If the Americans are taking an approach with respect to China to keep Chinese vehicles out, we have to do the same, or we put our market access at risk,” he said, noting that the industry has relied on a deeply integrated, cross-border supply chain for more than 60 years.

Kingston also argued that China is not a good trading partner because Beijing has shown it does not play by the rules-based trade and investment principles fundamental to the Canadian economy. He said domestic auto plants cannot compete fairly against the heavily state-subsidized manufacturing that is a major part of China’s strategy.

“This is a very well-known strategy that China deploys and they’re actually quite transparent about it in many instances around what the objectives are,” he said. “This is how they’ve driven economic growth, but we should absolutely not allow ourselves to succumb to that model and see an industry destroyed because of it.”

He used Europe as an example of what can happen when countries are “naive about the China threat.”

Chinese electric vehicles have gained significant traction in Europe, capturing 10 percent of the market and projecting to double that share by 2030, he said. This surge has contributed to the automotive sector there shedding more than 100,000 positions throughout 2024 and 2025.

“The European Union [is] importing a million Chinese cars and they’re only exporting about 160,000 units into the Chinese market,” he added. “So they’re effectively seeing their industry eroded by China.”

He said China also has market advantages over Canada because it can make vehicles more cheaply due to its far less stringent labour and environmental laws.

“Labour rights in many instances are non-existent,” he said, and workers do not have to be paid a fair wage, unlike Canada, where Unifor unionized employees receive $44.50 an hour. China also uses cheaper coal fired electricity compared to Canada’s clean grid.

The cheaper production costs allow China to produce far more EVs than it needs compared to North America, where he noted there is a deficit of roughly four million vehicles annually.

“China, they’ve got double their own consumption being built in the market,” he said. “So where does that go? Well, it’s dumped around the world... That’s what we’re up against and that presents massive economic risk to Canada and of course risk to our automotive industry.”