From Tariffs to Teamwork
Canada is signaling a major shift in its electric vehicle strategy. Rather than simply importing Chinese EVs, the country is now exploring the idea of manufacturing them domestically in partnership with Chinese automakers.
This new approach would see EVs built in Canada using local suppliers, then exported to markets worldwide. It marks a sharp departure from the previous stance of high import tariffs and strict alignment with U.S. trade policy.
Canadian Industry Steps In
Auto parts giants like Magna, Linamar, and Martinrea already operate in China. These companies could play a key role in a future Canada-China EV venture, offering both technical expertise and existing global supply chain access.
Despite Canada’s higher labor costs, the government believes domestic production can still be competitive on the global stage. Previous examples of affordable vehicle manufacturing in Ontario support that belief.
Joint production could also help Canadian suppliers expand their global relevance as the EV market accelerates and consolidates around key players.
Shifting Alliances and Economic Pressure
The shift in policy comes at a time of significant pressure on Canada’s auto sector. With American tariffs on Chinese EVs, declining investments from legacy automakers, and the rapid rise of Asian EV brands, Canada finds itself looking for new strategic partners.
Relying solely on U.S. automotive alliances is now seen as risky. A broader strategy—one that includes China—could offer more resilience in a changing global market.
Strategic Risk, Global Ambition
Building EVs with China on Canadian soil may raise political concerns. However, the willingness to consider such a partnership reflects Canada’s desire to stay relevant in a fast-moving industry. The success of this shift could redefine Canada’s role in the global EV supply chain.
What Comes Next?
While no formal deals have been announced, the groundwork for cooperation is being laid. If successful, this approach could become a model for how Western economies adapt to the new EV reality—balancing national interests with global competitiveness.
