After hitting a wall at home, China’s automakers are ready to try selling cars to Canadians.
Driving the news: Geely Auto, China’s second-largest automaker, is planning to start selling EVs in Canada next year through its own dealership network, the first push by a major Chinese car manufacturer into the Canadian market.
In January, Ottawa agreed to allow 49,000 Chinese-made electric vehicles into the country at a tariff rate of 6.1%.
Why it’s happening: Chinese companies are far ahead of Western automakers in the EV race (particularly on price), but demand at home has started to weaken, pushing them to expand into other markets. Geely’s domestic sales in the first nine months of this year have fallen 23%, while exports jumped 169%.
Why it matters: Ottawa hopes it can lure investment from Chinese automakers in domestic manufacturing to help offset the damage done by U.S. tariffs to the country’s existing auto sector.
Yes, but: The elephant in the room is how the U.S. will respond to Chinese forays into Canada’s auto sector. The White House has sounded different notes on the matter: Donald Trump has at times seemed surprisingly chill about Canada opening up its market, and at others citing it as a major trade issue and warning Canada against becoming a “drop-off port” for Chinese cars.
Zoom out: While Canada starts slowly cracking open the door to Chinese autos, Europe is trying to go in the opposite direction and cap Chinese car imports into the EU — its homegrown auto brands have steadily lost market to cheaper Chinese competitors, and Europe’s auto sector is facing mass layoffs.
