October 27, 2025 - Canada Likely to Open Up to Chinese Vehicles

This is the Telemetry Transportation Daily for October 27, 2025, and I'm Sam Abuelsamid, Vice President of Market Research for Telemetry.  

The trade war started by the Trump administration earlier this year is already having a significant impact on its largest trading partners, Canada and Mexico.  Various Chinese-made vehicles have been on sale in Mexico for several years, and Chinese brands already hold 20% of the new vehicle market there. However, in Canada, it's a different story. Apart from a few Chinese-manufactured models from Western brands like the Lincoln Nautilus, Buick Envision, and Polestar 2, there aren't any Chinese brands there, and there is a 100% tariff on Chinese-made EVs in Canada. 

However, that could soon change as the Trump policies are incentivizing automakers to shift more production from Canada to the U.S. General Motors is moving truck production from its Oshawa, Ontario, assembly plant to the U.S., and Stellantis is dropping plans to build its next-generation Jeep Compass in Ontario and will instead produce it in Illinois. While less directly related to tariffs than to the end of EV incentives in the U.S., GM has decided to discontinue its BrightDrop electric vans that were also being produced in Canada. 

With the Canadian auto industry being gutted and growing antipathy among Canadians toward U.S. products, this opens an opportunity for Chinese automakers in Canada. Canada has also faced tariffs from China on agricultural goods in retaliation for its auto tariffs. This could soon change as the government is reportedly looking to reduce or eliminate those 100% tariffs on Chinese EVs in return for eliminating tariffs on canola and other crops. If a deal is struck, it might also encourage some Chinese companies to invest and build EVs in Canada, perhaps purchasing some of the abandoned factories, such as the Stellantis plant in Brampton and the GM plant in Ingersoll, Ontario. 

If Chinese manufacturers can tap into the Canadian market with sales and manufacturing, that would pose a major long-term threat to the U.S. auto industry. While costs would be higher than producing in China, many of those companies have already launched vehicles that are much lower cost to produce than traditional vehicles, and they would likely have a significant advantage even without local Chinese subsidies.  The Canadian and Ontario governments would almost certainly provide some substantial incentives of their own to attract companies like BYD, Geely, or others to build there. 

Thanks for listening.