Canada Eyes Joint Venture to Build Chinese EVs for Global Export

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(Bloomberg) — Canada’s government is working to land a Chinese-Canadian auto plant that will export electric vehicles globally, Industry Minister Mélanie Joly said.

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She said Canadian auto parts firms such as Magna International Inc., Linamar Corp. and Martinrea International Inc. already have operations in China, and could participate in a joint-venture assembly plant in Canada.

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“We believe that these great Canadian champions can partner with Chinese EV companies to make a Canadian-Chinese car to export it around the world,” Joly said in an interview with Bloomberg News on Friday.

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The overtures to Chinese automakers mark a turnaround for the Canadian government as it looks to reduce dependence on the US market for cars and build a stronger domestic industry. Canada had previously said China was unfairly subsidizing its manufacturers, while security concerns have been raised over the vehicles’ technology.

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“We can find a way to have software in the car that will address the security concerns,” she said. “We think we’re able to have labor standards that are in conformity with what we accept and expect in Canada, and that there can be local supply chains in Canada that are created out of these investments.”

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Joly said there are “active conversations” on how domestic firms might complement new Chinese investment into Canada’s auto sector, including with software developer QNX, which is headquartered in Ottawa and owned by BlackBerry Ltd. On a recent trip to China, Joly met with Chinese auto firms BYD Co. Ltd., the world’s largest producer of EVs, and Chery Automobile Co.

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“I’ve already raised the fact with many Chinese companies that QNX is a state-of-the-art company that we could scale even more around the world,” she said.

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The minister argued that a co-created EV could still be competitive globally despite the higher labor costs of building in Canada compared to China. She pointed to Honda Motor Co., which builds its affordably priced Civic car in Ontario, as an example. “We can find a way to square the circle,” she said.

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Canada’s goal of attracting Chinese auto investment is part of Prime Minister Mark Carney’s broader trade truce with Chinese President Xi Jinping. In January, China agreed to begin removing duties on Canadian agriculture products in exchange for Canada exempting as many as 49,000 Chinese-built EVs annually from a 100% tariff imposed in 2024.

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On Thursday, Carney and Joly unveiled an overarching strategy for Canada’s auto sector, which has been hammered by US President Donald Trump’s tariffs. General Motors Co. recently announced layoffs at its Canadian plants and Stellantis NV reneged on a decision to restart a factory near Toronto to build a Jeep model. 

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The strategy includes revamping Canada’s counter-tariff approach to reward firms that maintain production in the country.