As consul general of Canada to Hawaii, I’ve witnessed Hawaii’s ambitious and growing agenda to combat climate change and sea-level rise. Hawaii’s aggressive targets — including achieving 100 % renewable energy and carbon neutrality by 2045 — reflect both the seriousness of the challenges, as well as the state’s commitment to addressing them.

Canada is strongly aligned with Hawaii on the need for urgent climate action and is encouraged to see the high bar Hawaii has set for accelerating the transition to net zero. Canada is also taking ambitious action; like Hawaii, we have committed that all new passenger vehicles be zero-emission by 2035.

In the fight against climate change, reducing emissions from transportation is a top priority and a key area for greater Canada-U.S. cooperation. Both Hawaii and Canada know this and are investing in the infrastructure that will be crucial for widespread adoption of EVs. But what about EV supply?

In fact, Canada and the U.S. are well positioned to become global leaders in zero-emission vehicles (ZEV) production. Through years of specialization and integration, our cross-border automotive manufacturing capacity gives us a significant competitive edge, and the opportunity to accelerate the large-scale, transformational change on which our collective future depends. Maintaining this integrated capacity will be crucial in helping Hawaii — and other U.S. states — make a sustainable transition to electric vehicles while strengthening the North American supply chains underpinning our shared prosperity and security.

Unfortunately, North America’s future leadership in EV production is currently at risk and may slow the EV transition on both sides of the border. There is a new tax credit for EVs proposed in the Build Back Better bill currently in the U.S. Senate. Canada supports the use of tax credits to usher in the adoption of EVs to meet our shared climate objectives. However, aspects of this tax credit are jeopardizing the U.S.-Canada automotive industry and threatening to kill American jobs.

Americans and Canadians currently make cars together seamlessly. Our companies routinely trade parts five to six times before a final vehicle rolls off the assembly line. Canadian-made cars already average about 50% U.S. content. Canadian cars are U.S. cars. Overall, the $100 billion in automotive trade that the U.S. and Canada do each year helps to sustain 1.1 million good-paying jobs, many of them unionized.

Unfortunately, elements in the tax credit will throw a wrench in the economics of our shared industry and will challenge our climate goals. Since Canadian-assembled vehicles won’t be eligible under the tax credit, the American jobs that are supported by Canadian orders will be at risk. Those orders will simply dry up as the integrated supply chains are interrupted and uncertainty around cross-border trade takes hold. By changing the economics that have kept our automotive industry competitive for decades, jobs will be at risk at a time when we can’t afford to lose our global competitive edge on EVs.

Leaders in Canada and the U.S., including in Hawaii, are dedicated to a ZEV future. That’s why, earlier this year, our countries agreed on a plan to make the U.S. and Canada the global leaders in EV battery production. Canada is the only North American country with all the critical minerals needed to make EV batteries. It only makes sense to continue to source metals and minerals like cobalt and nickel from Canada instead of from overseas. Amid an evolving geopolitical and geo-economic context, building resilience into the EV battery supply chain will support future North American EV leadership.

If Canada is shut out of the U.S. EV market, there will be pressure from Canadians to respond. Luckily there’s still time to find a solution. Members of Congress are currently debating details of this EV tax credit. Let’s encourage them to find a solution that preserves the integrated Canada-U.S. automotive market so we can shift into high gear and, together, win the race on EVs that will keep us on track to a net-zero future.

Rana Sarkar is consul general of Canada in San Francisco, covering Northern California and Hawaii.