Trade uncertainty puts B.C. EV-maker at a manufacturing crossroadson March 10, 2025 at 7:00 pm

Threats are posing sourcing and production challenges for Vancouver-based Damon Inc., which must decide to begin manufacturing in B.C. or go elsewhere amid delays

Tariff threats could drive at least one B.C. electric vehicle company away from the province.

Ongoing trade uncertainty has pushed Vancouver-based Damon Inc. (Nasdaq:DMN) to seriously consider whether it commences manufacturing of its electric motorcycles in the Lower Mainland or go elsewhere.

“This is where, unfortunately, the politics of the new leadership in the U.S. is really taking a foothold into these decisions,” said Damon co-founder Dominique Kwong.

The B.C. company has two electric motorcycles in development and aims to release its first motorcycle by the start of 2027.

“We want to be involved in your entire personal mobility journey,” Kwong said. “The financial part is always going to be No. 1. … Convenience is also up there.”

The U.S. has been on a tear in recent weeks, announcing and pausing plans for 25 per cent tariffs on Canadian goods. The auto industry has been given reprieve until at least April 2.

This uncertainty is affecting where Damon will source and transform raw goods into the finished product.

“That’s a huge hit,” said Kwong. “We will build the vehicles where it makes sense for us, as far as sales and also the logistics.”

He reiterated in an email follow-up last week the company is re-evaluating its need for manufacturing.

“With our new Damon 2.0 business plan and the current economic conditions at hand, we need to explore more capital-efficient paths for the company,” he said.

Four years ago, Damon broke ground on the site of its new head office and manufacturing facility in Surrey, where as many as 40,000 motorcycles would be produced annually.

The 110,000-square-foot facility owned by Bosa Properties entered a 10-year lease agreement with Damon – expected to host a combined 800 manufacturing and office jobs.

At the time, former CEO Jay Giraud told BIV the company expected to hit nearly $1 billion in annual revenue by 2025, with another plant in Latin America expected to be up and running by then.

Since then, a Nov. 24 release by the company provided some insight on their development progress and financial challenges, which have caused significant delays.

Now with 15 in-house engineers, the release said pre-production is expected to be completed in late 2025. It also said it plans to establish a manufacturing facility in California and begin production in 2026.

Decline of Tesla to benefit local EVs

Despite those uncertainties, a sharp change in public sentiment toward Tesla Inc. (Nasdaq:TSLA) CEO Elon Musk may play to the benefit of B.C.-manufactured electric vehicles like Damon’s.

Kwong says drivers thinking twice about buying a Tesla may also be considering other efficient transportation options like e-bikes and motorcycles.

As of Mar. 10, Tesla’s stock was down by about 42 per cent since last year, while its market capitalization sat at around US$844.9 billion.

Its market cap has fallen by US$455.1 billion since Dec. 31, 2024. And according to a Feb. 25 report by the European Automobile Manufacturers Association, Tesla’s European sales dropped by 45.2 per cent in January compared with the same month last year.

Closer to home, S&P Global Mobility data showed that Tesla registrations dropped more than 72 per cent across Canada from December 2024 to January 2025. Part of this decline can be attributed to the discontinuation of federal and provincial incentives, said the report.

The report also showed that B.C.’s share of the total new EV registrations in Canada decreased from 24.3 per cent in Q4 2023 to 22.5 per cent in Q4 2024.

“I’m a Tesla owner myself, and I haven’t come across anybody that’s exactly pleased with what [Musk’s] done,” said Bob Porter, president of the Vancouver Electric Vehicle Association. “As far as owners, we’re kind of shocked.”

He said potential tariffs between Canada and the U.S. means rising prices from cars manufactured south of the border could further tip the balance towards EVs made in Canada and other countries.

With files from Tyler Orton

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