Chinese EV Giant Chery Enters Canada Amid New Trade Deal

Chery to Launch in Canada as EV Tariffs Drop to 6.1%

Chinese automaker Chery Automobile is actively preparing its entry into the Canadian market, following a new trade agreement between Canada and Beijing. The deal dramatically reduces the surtax on a quota of Chinese electric vehicles from 100% to 6.1%, paving the way for the company's North American expansion.

Details of the New Canada-China Trade Agreement

The policy shift, announced on January 16, was brokered by Prime Minister Mark Carney and allows for the annual import of 49,000 Chinese-made EVs. This quota is scheduled to increase to 70,000 units over the next five years. In return, Beijing has agreed to lower retaliatory duties on key Canadian agricultural exports, such as canola and various seafood products.

Impact on the Automotive Market

Chery is aggressively building its Canadian presence from the ground up, with recruitment efforts targeting experienced automotive professionals for its Omoda and Jaecoo sub-brands. Reports indicate plans to establish a corporate headquarters in the Toronto area. This move marks the first major push by a homegrown Chinese automaker into Canada's mainstream passenger vehicle segment, a strategy similar to Vietnamese automaker VinFast's 2022 market entry. While Western brands like Tesla and Volvo already export vehicles made in China to Canada, Chery's initiative represents a significant new competitor.

Market Outlook

Chery is the first of its domestic competitors to leverage the de-escalation of trade tensions. The company's performance will be closely watched as it establishes its foothold in North America, signaling a potential shift in the region's automotive landscape.

FAQ

Q: What is the new tariff on Chinese EVs in Canada?
A: The tariff on a limited quota of Chinese-made EVs has been reduced from a 100% surtax to 6.1%.

Q: Which Chinese company is entering the Canadian market?
A: Chery Automobile Co. Ltd. is establishing a sales operation for its sub-brands, Omoda and Jaecoo.

Q: What is the annual import quota for Chinese EVs under the new deal?
A: The initial annual quota is 49,000 vehicles, which is set to increase to 70,000 over five years.

Source: The Globe and Mail via Investing.com