If we exclude Polestar and Volvo, two subsidiaries of the Chinese manufacturer Geely which prefer to present themselves as Swedish, no Chinese brand sells electric vehicles in Canada. But tax or not, these vehicles sold for half the price of the models found here continue to approach the Canadian market.
Moreover, the reaction of Canadian automotive sector experts is not to speculate on “if” Chinese manufacturers will sell electric vehicles in Canada, but on “when”.
“It’s a question of time,” says Michelle LLambías Meunier, CEO of Propulsion Québec, which represents the Quebec electric transport sector.
What I hear in the industry is that the [surtaxe de 100 % sur les véhicules électriques chinois] will, at worst, only temporary, while the rest of the industry adjusts.
Michelle LLambías Meunier, CEO of Propulsion Québec
Build Your Dreams
The Chinese manufacturer closest to Canada and the United States is BYD, whose slogan is “Build your dreams”. Before Canada and the United States imposed a 100% surcharge on electric vehicles assembled in China, one of BYD’s largest shareholders was Berkshire Hathaway, led by American billionaire Warren Buffett.
PHOTO GILLES SABRIÉ, THE NEW YORK TIMES ARCHIVES
BYD’s slogan, “Build your dreams”, is displayed on the back of a vehicle from the Chinese manufacturer.
The Omaha, Nebraska-based firm has reduced its stake in BYD over the past year, from around 20% to less than 5%. Trade tensions between China and the United States would have convinced her of the lower-than-expected future return on this investment.
Because even before the surcharge, the United States had included in theInflation Reduction Act (IRA) of 2022 a measure that prevents the sale on American soil of any electric vehicle whose battery or certain electronic components come from China.
BYD’s arrival in the United States will therefore not happen as quickly as hoped. But its vehicles are already sold in Mexico. BYD plans to open a factory on Mexican soil capable of producing electric vehicles for the entire planet.
Mexico is seen by the Chinese automotive industry as a promising springboard for internationalization. In addition to BYD and Geely, owner of Polestar and Volvo, the Nio, Great Wall Motors and Xpeng brands are among the most likely to take the automotive world by storm in the coming years, Swiss financial company UBS recently noted.
Like Japanese brands
BYD could be the first to arrive in Canada. Canadian representatives of BYD registered with the Federal Registry of Lobbyists last July. Among the reasons given for speaking to the federal government: the import tax, of course, but also, “the conditions of entry into the Canadian market of a new retailer of light electric vehicles”.
In addition to direct sales, BYD announced in mid-August that 100,000 of its vehicles will soon be offered in car sharing, thanks to a partnership with the American company Uber, first in Europe, then in Latin America, in Australia, but also… in Canada.
This could be one step closer to its entry into the United States. Because without American buyers, its growth risks being less sustained. BYD saw its annual revenues jump from 24 billion to 112 billion Canadian dollars between 2018 and 2023, then rise more modestly to 121 billion for the 2024 financial year concluded on June 30.
PHOTO GILLES SABRIÉ, THE NEW YORK TIMES ARCHIVES
BYD electric taxis near the automaker’s headquarters in Shenzhen, China
To break into North America, BYD and other Chinese manufacturers could follow the path already traced by others before them. “It’s quite simple: they are inspired by what the Japanese did more than 40 years ago,” says the president and CEO of the pan-Canadian sector organization Electric Mobility Canada, Daniel Breton. “It’s gone pretty well since then for Japanese brands! »
Mr. Breton could also cite the entry into Canada of the first Korean vehicles. In the early 1980s, Hyundai thought it would take the Canadian market by storm by assembling its cars locally, particularly in Bromont. The poor quality of the first Hyundai vehicles forced the company to review its strategy, but the brand is now more successful than most of its competitors in the country.
“We will have to be extremely careful when new manufacturers enter the market,” he says. These vehicles may not be ready for our road conditions, or for the effects of the Canadian winter.
The more than uncertain reliability of the first Chinese electric vehicles that will eventually be sold in Canada is the first thing that CAA Quebec automotive expert Jesse Caron points out when asked about them.
Jesse Caron recalls, as a warning, the enthusiasm generated in Canada at the end of 2021 by the Chinese brand Imperium, better known as Skywell, which had started accepting deposits from Canadian buyers interested in electric vehicles which she hoped to sell with us later. It never happened.