Following the rupture between the US and Canadian arms of the North American auto industry, Canada reversed years of industrial policy and slashed tariffs in order to allow a limited number of Chinese EVs into its market. Chinese automakers are losing no time in taking advantage of the opportunity.
Chinese EV giant BYD has announced plans to open 20 branded dealerships in Canada within a year. The Globe and Mail reports that BYD has hired Dealer Solutions Mergers & Acquisitions, an Ontario-based automotive retail consultancy, to find dealership locations across the country. “They’ve asked us to help them find as many of the 20 that they possibly can, but they’re out there doing that themselves as well,” said CEO Farid Ahmad.
The Globe reports that three locations in the Greater Toronto Area are already under discussion, and that BYD’s future plans include forays into Vancouver, Montreal and Calgary.
Other dragons are circling. Carscoops reports that Chery Automobile is also working to build an independent dealership network in Canada.
The trade deal Canada made with China in January cut the tariff on Chinese-built EVs from 100% to 6.1%, but also imposed a cap of 49,000 Chinese-made EVs in the first year, and prioritizes EVs with prices under $35,000—such as BYD’s Atto 3 compact SUV or Dolphin hatchback.
Electrek’s Fred Lambert calls the news “one of the most consequential developments for the Canadian auto market in years,” and adds that “this isn’t a tentative toe-dip, it’s a full-scale market entry.”
The big question is: How long will Canada stick to the 49,000-unit import cap, which applies collectively to all Chinese automakers? This may include not only Chery, but Tesla, which hopes to export Model 3s from Shanghai. A fraction of 49,000 units might not give BYD enough volume to keep 20 stores busy. But the deal includes provisions to raise the cap after the first year, and BYD is probably betting that, once Canadian consumers get a load of its moderately-priced EVs, the government will start feeling pressure to raise the cap.
It all sounds like good news for Canadian car buyers, good news for BYD and other automakers that are able to seize the opportunity, and some much-needed good news for our atmosphere once a few thousand more EVs hit the roads. It may also present an opportunity for shady dealers who can find ways to sneak a few Chinese EVs across the border.
It’s absolutely awful news for Detroit.
Sources: The Globe and Mail, Electrek
Image: Aleksandr Fedosov – stock.adobe.com
