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China’s electric vehicles are coming to North America at a terrible time

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by Gordon G. Chang, opinion contributor - 04/14/26 10:30 AM ET

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by Gordon G. Chang, opinion contributor - 04/14/26 10:30 AM ET

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Media representative is seen exploring newly revealed BYD Seal 6 wagon during media launch at the 2026 Melbourne Motor Show. (Photo by Alexander Bogatyrev/SOPA Images/LightRocket via Getty Images)

Stellantis NV is in early discussions to build Chinese electric vehicles in Brampton, Ontario. The global car company proposes to assemble the vehicles from knockdown kits supplied by its Chinese partner, Zhejiang Leapmotor Technology. The European-based auto giant bought a 20 percent stake in Leapmotor in 2023.

Unifor, the union at the now idle plant, and the Canadian government have rejected the Stellantis plan because they want full manufacturing operations in Brampton, as the company had promised when it took Canadian subsidies.

Producing cars from the Chinese kits would not require many workers and would result in very little added Canadian value. Flavio Volpe, the head of the Canadian Automotive Parts Manufacturers’ Association, compared knockdown kits to IKEA furniture.

“They are manufactured in Sweden, boxed and exported to stores abroad,” he told Automotive News Canada. “If you buy a sofa in Montreal and put it together, is that manufacturing a sofa in Canada?”

Whether or not the Stellantis proposal is accepted, Chinese electric vehicles are coming to North America. China’s vehicles are certainly welcome in Canada.

Prime Minister Mark Carney agreed, as part of his January trade deal with Beijing, to drop his country’s 100 percent tariffs on 49,000 Chinese electric vehicles to 6.1 percent in the first year of the arrangement. The quota is set to rise to 70,000 vehicles annually by 2030. Carney’s government also announced it wanted joint ventures with Chinese car companies “with trusted partners.”

Given the small size of the Canadian car market, Carney is apparently hoping that Canadian-made vehicles will be exported. The most logical export market for Canada is, of course, the U.S. So far, the reaction from Canada’s neighbor to the south has not been positive.

“Canadians are welcome to visit the U.S. in their new Chinese [electric vehicles], but if they think they’re going to sell them here, that’s not going to happen,” Pete Hoekstra, the U.S. ambassador to Ottawa, told me this month.

At the moment, 100 percent tariffs on Chinese electric vehicles keep them off U.S. roads. And if that were not enough, a Biden January 2025 rule prohibits Chinese and Russian hardware and software in “connected vehicles.” It notes that Chinese electric vehicles transmit data back to China, essentially making them rolling spy machines.

So how will Chinese car companies enter the American market? In January, President Donald Trump told the Detroit Economic Club that he is willing to let them build factories in America.

Ford has preliminarily signaled that it would be willing to enter into a joint venture with a Chinese car company.

“We’re getting very close to the proverbial dam breaking,” China auto analyst Michael Dunne told Bloomberg. “The path for the Chinese—the one they’re looking at intensively right now—is the option to manufacture in the United States and possibly with an American partner.”

China’s EVs are very good cars. “Their cost, their quality of their vehicles is far superior to what I see in the West,” Jim Farley, Ford’s CEO, said last year. “We are in a global competition with China, and it’s not just EVs. And if we lose this, we do not have a future at Ford.”

American carmakers have survived waves of foreigners with better cars: first the Japanese and then the Koreans. The Chinese, however, may be more difficult competitors.

Bill Russo, the Shanghai-based founder of the advisory firm Automobility Limited, said China’s carmakers have created a “discontinuity in terms of the product architecture.” He believes Beijing has pushed the car industry into the “2.0 era” defined by software and computing architectures, AI capabilities and data integration.

“They’ve turned the car into a smartphone on wheels,” Russo says.

Chinese cars are superior, but Chinese car companies, built on government subsidies, are vulnerable. BYD, the world’s leading electric vehicle maker, received at least $3.7 billion in direct payments by 2024. China handed out about $230.9 billion to support the country’s electric vehicle industry from 2009 to 2023. Few Chinese car companies are profitable, and even BYD is