Ongoing auto tariffs may drive one B.C. electric vehicle manufacturer to look beyond the U.S. market.
“It forces us to look abroad and see how we work together with other markets,” Dominique Kwong, co-founder and CEO of Vancouver-based Damon Inc. (Nasdaq:DMN), told BIV on Monday. “Maybe we’re changing the priorities of other markets … and having to revisit the U.S. every quarter—it’s unfortunate, because it’s hard to adjust.”
The Vancouver-based EV company has two electric motorcycles in development and aims to release its first bike by the start of 2027.
U.S. President Donald Trump announced plans for 25 per cent tariffs on Canadian goods in March. Earlier that month, Kwong told BIV his company was at a manufacturing crossroads, deciding whether to begin production in B.C. 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,” he said at the time. “We will build the vehicles where it makes sense for us, as far as sales and also the logistics.”
Trade tensions have only worsened since following the implementation of 25-per-cent tariffs on Canadian automobile imports and parts earlier this month. Prime Minister Mark Carney subsequently announced matching the tariffs.
“It’s been a wild ride,” Kwong said. “What we end up doing is trying to understand the cost structures and try to find as much certainty in uncertainty, because it’s hard to forecast.”
Kwong said not knowing if or when the tariffs will end, as well as fears that they could increase, make it challenging to set prices. The application of tariffs on vehicle parts and equipment needed to build Damon’s products also poses challenges, he added.
“How do we pass along an extra 30 per cent to our customers? How do you absorb it? ... It's just too dynamic in nature,” he said. “If we had an 18-to-24-month view that this is what's happening, and it's going to be established for this period of time, we adjust.”
Kwong said it is still to be determined if the implementation of auto tariffs has offered any clarity for Damon’s manufacturing plans.
“We are a global manufacturer of our vehicles and our products,” he said. “We're constantly evaluating whether it’s local or abroad, we're doing both. There's not one strategy where we’re moving everything from Canada and going to the U.S.—that's not true.”
Ground was broken in 2021 on the site of a new head office and manufacturing plant for Damon in Surrey, where the company said as many as 40,000 motorcycles would be made annually.
The 110,000-square-foot facility was expected to host 800 manufacturing and office jobs, with the company expecting at the time to hit nearly $1 billion in annual revenue by 2025.
Damon announced in November 2024 that financial challenges have caused significant delays.
-With files from Tyler Orton
