Canada Industry Minister Courts Chinese EV Makers, Eyes Local Plants

Canada is making a direct pitch to Chinese automakers. Industry Minister Mélanie Joly this week began an Asia-Pacific visit, with stops in Shanghai, Changzhou, Wuxi. The trip includes meetings with executives from BYD, Chery, Geely, Shanghai Launch Automotive Technology, alongside visits to manufacturing plants, R&D facilities.

The objective is clear: attract Chinese automakers to build vehicles in Canada, create jobs, strengthen the country’s automotive sector.

For Canada, the strategy aims to balance two priorities. The government wants access to more affordable, technologically advanced Chinese electric vehicles. At the same time, it seeks to protect more than 500K jobs tied to the domestic auto industry.

The outreach marks a sharp reversal from Canada’s position two years ago. In 2024, Canada followed the United States in imposing a 100% tariff on Chinese-made EVs, seeking to block their entry into the North American market.

The policy shifted in January 2026. Canada cut tariffs on Chinese EV imports to 6.1%, introduced an annual low-tariff quota of 49K vehicles. In exchange, China eased import restrictions on Canadian agricultural products including canola.

The agreement quickly opened the door for Chinese automakers. Chery’s Omoda, Jaecoo brands have begun exploring the Canadian market. Geely has entered through its Lotus premium EV business. BYD has also been linked to plans for deploying its megawatt flash-charging network in Canada.

Behind Ottawa’s policy shift lies growing pressure from its domestic EV industry. Over the past several years, Canada invested heavily in building a complete EV supply chain spanning vehicles, batteries, raw materials. Several flagship projects, however, have struggled. Honda earlier paused its C$15B ($10.71B) EV investment project in Ontario. Battery startup Northvolt, once viewed as a cornerstone of Canada’s battery ambitions, also collapsed.

China possesses many of the capabilities Canada now seeks. More than a decade of investment has helped China build the world’s most comprehensive EV supply chain. Global battery installations reached roughly 352.7 GWh during the first four months of the year. Seven of the world’s top 10 battery manufacturers were Chinese companies, accounting for 254.6 GWh of installations, up 17% year-on-year. Their combined global market share reached 72.2%.

Canada’s offer, however, comes with conditions. Ottawa wants projects structured as Canadian-controlled joint ventures. It also requires priority sourcing from local suppliers, compliance with Canadian labor standards, adherence to data-security rules.

Those requirements may complicate negotiations with some automakers. BYD Executive Vice President Stella Li previously indicated the company prefers wholly owned overseas manufacturing operations. Its vertically integrated business model does not fully align with a joint-venture structure.

Geely may prove more flexible. The company already operates in Canada through Volvo, Polestar, giving it an established local presence. Chery is gradually building sales channels through Omoda, Jaecoo, laying groundwork for potential future investment.