Canada-Chinese Automakers

Investment Analysis Clubs Macro Economic Trends and Risks
1

Who has the leverage? Canada or Chinese automakers?
Chinese EV & hybrids are spreading rapidly throughout the world. [*]
The Canadian-China EV deal allows 49,000 EV imports, initially, expanding to 70,000 in year 5. Not many. China can set Canada on the back burner temporarily as it has no restrictions in other parts of the world.
Right now BYD is playing hardball. They have the goal of becoming the #1 car manufacturer in the world.

Canada’s Industry Minister Mélanie Joly is in China this week courting four Chinese automakers she wants to build electric vehicles on Canadian soil, the clearest test yet of whether Ottawa can convert tariff relief into local factories.

Joly is meeting BYD, Chery, Geely and Shanghai Launch Automotive Technology, each of which has been weighing a Canadian investment, she told The Globe and Mail.

“What is important is how can we make sure that we offer great vehicles to Canadians that are actually affordable, and with the latest technology, while keeping and protecting our 500,000 auto workers,” she told the newspaper.

Joly is holding to four conditions, unchanged for these talks, that any Chinese EV investment must satisfy.

Canada’s Industry Minister Mélanie Joly is in China this week courting four Chinese automakers she wants to build electric vehicles on Canadian soil, the clearest test yet of whether Ottawa can convert tariff relief into local factories.

Joly is meeting BYD, Chery, Geely and Shanghai Launch Automotive Technology, each of which has been weighing a Canadian investment, she told The Globe and Mail.

The three biggest names on Joly’s list have staked out sharply different positions.

BYD has been the most direct, and the most at odds with Ottawa.

Executive VP Stella Li told Bloomberg the company is studying a Canadian plant but would insist on owning and operating it outright, rejecting the joint-venture model Joly has set as a condition.

“I don’t think a JV will work,” Li said, pointing to BYD‘s vertical integration, since the company builds its own batteries, motors and chips.

Li also signalled openness to buying an established carmaker rather than starting from scratch, telling Bloomberg that “we’re open to every opportunity we have” and “we’ll see what benefits us,” while noting no deal was in the works.

Geely has struck a warmer note. The group’s chief executive confirmed at the executive level that Geely is entering the Canadian market, said certification for its Geely-branded vehicles should come “soon,” and pointed to local production — a stance that fits Joly’s framework more comfortably.

Geely also starts from a foothold its rivals lack, already operating in Canada through Volvo and Polestar, and has begun hiring in Toronto while trademarking its Zeekr brand there.

Chery, the third name, has said the least on the record, and did not respond to the Globe’s emailed questions.

[*]

1 Like
2

The first line of defense against dumping is cost control and manufacturing efficiency, the second is income diversification. Some time ago some people were complaining that Tesla was not paying enough attention to cars (canceling older models). I wonder if Tesla figured it needed to diversity instead of fighting in a commodity market.

The Captain

o o o o o o o o o o o

For the fun of it I asked AI…

The first line of defense against dumping is cost control and manufacturing efficiency, the second is income diversification.

GoogleAI:

The two-step defense strategy you outlined provides a highly effective framework for businesses navigating unfair global trade practices and market distortions. When foreign competitors flood your market with underpriced goods, internal optimization and strategic flexibility determine survival.

Here is a breakdown of how these defenses function and why they are critical.

:couch_and_lamp: First Line of Defense: Internal Optimization

Focus entirely on what your business can control directly to absorb price shocks.

  • Cost Control: Eliminate waste and optimize supply chains. Lower overhead reduces your baseline break-even point.
  • Manufacturing Efficiency: Invest in automation and lean manufacturing. High output per worker offsets cheap foreign labor advantages.
  • Margin Cushion: Maximizing efficiency creates a pricing buffer. This lets you lower prices temporarily to retain market share without bleeding cash. [1, 2, 3, 4]

:shield: Second Line of Defense: Market Flexibility

Build external resilience so that a hit to your core product line does not destroy the entire enterprise.

  • Income Diversification: Spread financial risk across different revenue streams. Avoid relying on a single product or demographic.
  • Product Evolution: Move upmarket into premium, customized, or high-margin variations. Aggressive dumpers usually target commoditized, mass-produced goods.
  • Service Integration: Bundle physical products with proprietary software, maintenance, or training. Services are incredibly difficult for foreign dumpers to replicate locally.

o o o o o o o o o o o

Make the CyberCab trunk small! :innocent:

1 Like
3

A Canadian auto assembly plant is producing maybe 10% of the value of the vehicle assuming all the parts are coming from China. Seems to me it should be pretty easy to strike a deal.

intercst

1 Like
4

BYD back tracks:
https://gmauthority.com/blog/2026/06/chinese-automakers-byd-chery-and-geely-open-to-joint-ventures-to-build-cars-in-canada/

BYD, Chery, and Geely have indicated they are “willing to explore” joint ventures in Canada as the federal government works to attract new automotive investment.

Ottawa has made it clear that Chinese automakers seeking a larger presence in Canada would need to invest through majority-Canadian-owned joint ventures and integrate with local supply chains. Joly said the goal is to bring advanced vehicle technology into the country while maintaining the strength of the domestic industry. “We want to make sure that we can bring the best technologies to Canada while protecting the 500,000 jobs that are tied to our auto sector,” Joly said.

BYD hard nose approach did not bend Canada.
I suppose BYD is hoping once they get a toe in the door they can bend Canada more toward BYD’s advantage.

3 Likes
5

Maybe. While 1.9m vehicles are sold in Canada each year, almost 90% of those are light trucks and large SUVs. The market for sedans, which is what China is producing (first) is around 225,000, so 50,000 is a pretty significant share of the market they’re targeting . 70,000 gets you to 1/3 of the market, so that would be a hurt, at least to some incumbent brands.

2 Likes
6

Maybe. China has some large & mid size SUV EVs. If it was me, I would introduce those models.
BYD 7 seat Tang:
https://fuelcellsworks.com/2026/06/17/ev/byd-s-great-tang-flagship-suv-lands-at-35-500-150-000-preorders-590-miles-of-range-5-minute-charging
BYD has launched its full-size flagship Great Tang (Datang) electric SUV starting at 239,900 yuan ($35,500), after a record 150,000+ preorders — claiming up to 590 miles of range and a recharge in as little as five minutes via its new Blade Battery 2.0 and Flash Charging. Loaded with “29 world firsts,” triple dash screens, zero-gravity seats and Lidar-based ADAS, it marks BYD’s push upmarket from its sub-$10,000 budget EVs.

And the currently in production Sea Lion which is the same size as Tesla Y and thousands of $ less.