According to documents filed with the Canadian government, BYD, China’s largest electric vehicle (EV) manufacturer, is planning to enter the Canadian car market.
This move, if realized, would represent another step in China’s ambition to dominate the global automotive landscape.
Overcoming Tariff Barriers
While substantial tariffs are currently preventing Chinese EVs from entering the U.S. market, China’s thriving EV manufacturers are not deterred from targeting America’s neighboring countries.
Automotive News was the first to report on Tuesday that BYD has registered lobbyists with the Canadian government, signaling their intent to “advise on matters related to the expected market entry of BYD into Canada for the sale of passenger electric vehicles, and the establishment of a new business, and the application of tariffs on EVs.”
Furthermore, BYD representatives have reportedly met with Canadian car dealers to discuss potential dealership arrangements.
BYD’s Rapid Expansion and Global Ambitions
BYD has experienced remarkable growth in manufacturing capacity and global presence, but tariffs have hindered its ability to sell cars directly in the U.S. market.
China’s EV industry has seen explosive growth in recent years, producing some of the most cost-competitive and technologically advanced EVs available.
Concerns About China’s EV Dominance
The rapid rise of China’s EV industry has raised concerns among car companies and governments worldwide.
Fueled by substantial government subsidies and fierce domestic competition, Chinese car manufacturers have quickly emerged as formidable global players.
They possess the ability to rapidly introduce new models with a significant cost advantage over established competitors.
Additionally, China has established a dominant position in the lithium-ion battery supply chain. Some estimates predict that Chinese brands will account for one-third of all vehicle sales by 2030.
Tariff Considerations and Potential Implications for the US
In response to these concerns, the Biden administration recently imposed 100% tariffs on EVs imported from China and implemented policies aimed at promoting domestic and regional manufacturing of critical EV components.
Canada is also considering similar tariffs to counter China’s growing influence, mirroring actions taken by the U.S. and the EU.
Ensuring these tariffs are as favorable as possible to BYD is undoubtedly a top priority for the company’s newly registered lobbyists.
The potential implications for the U.S. are significant. Since Chinese EV companies cannot directly import into the U.S., they may seek alternative avenues to enter this lucrative market.
This could involve establishing a presence in Mexico and Canada, as suggested by an auto industry analyst in Automotive News.
BYD’s Existing Presence in North America
BYD already has a foothold in North America. In Mexico, it sells passenger vehicles, including the hybrid Shark pickup truck. In the U.S., BYD manufactures and sells both electric buses and trucks at a California-based factory.
However, BYD’s North America president stated earlier this year that the company does not currently have plans to enter the U.S. passenger vehicle market.