Chinese carmakers exploring Canada’s EV import quota, Joly says

Investing.com -- Four Chinese automakers are examining ways to use Canada's low-tariff import quota for electric vehicles and are considering domestic manufacturing partnerships, Industry Minister Melanie Joly said Monday.

Joly traveled to China last week and met with officials from BYD Co., Chery Automobile Co., Zhejiang Geely Holding Group Co., and Shanghai Launch Automotive Technical Co.

Her trip followed Prime Minister Mark Carney's January visit to Beijing, where he announced a trade agreement that permits up to 49,000 Chinese-made EVs to enter Canada under a tariff of approximately 6%. The deal eliminated the additional 100% tariff imposed on the vehicles in 2024.

Under the agreement, Carney's government is seeking to attract Chinese investment into the Canadian auto sector.

Joly told reporters that all the companies she met with are "willing to explore creating joint ventures in Canada in order to produce in Canada."

She stated that such arrangements would need to meet specific conditions, including Canadian control of the joint venture and a localized supply chain.

"We need to make sure that we are able to do this right," she said, referencing her ministerial oversight of the Investment Canada Act, which permits her to set conditions on sensitive foreign investments in Canada.

Carney's government has held discussions with Stellantis NV about building Chinese EVs in an idled plant in Brampton, Ontario. The vehicles would potentially be produced through Stellantis' joint venture with Chinese firm Zhejiang Leapmotor Technology Co.

After news of the talks emerged, Joly said she would reject "cars in a kit," where the parts are built overseas and shipped to Canada for final assembly.

Chinese-made EVs began entering Canada under the new low-tariff quota in May. The majority are Tesla Inc. cars made at the company's Shanghai factory.

Last month, Honda Motor Co. indefinitely suspended plans to build a C$15 billion battery supply chain in Alliston, Ontario.

"I'm confident good news is coming," Joly said. "I know that there's a lot of anxiety in the auto sector, but to those working in Alliston, we have your back and we're working with the company."

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