Chinese EV makers have sights set on Quebec market

Dongfeng is the modish Chinese automaker to unveil its electric car vehicle offering in Montreal’s older port wine, with a media prevue of several EV and hybrid models taking place Wednesday afternoon.

Two of Dongfeng's EV models are currently undergoing the certification process required to be sold in Canada. One of them, the Nano Box 01, is a compact electric vehicle.

Benoit Charette, automotive columnist and editor in chief of L'Annuel de l'Automobile, anticipates the car to cost somewhere between $20,000 and $25,000 when it officially enters the Canadian market. Julia Mazora Fernandez pegged the eventual cost closer to $35,000. She's the director of North World Industry, the designated Canadian distributor for the Chinese automaker.

Is Canada equipped to handle Chinese EVs?

The second Dongfeng model that's awaiting Canadian certification is the Vigo, an SUV.

Mazora Fernandez said the company's goal is to have these two models available sometime next year.

In 2024, the Justin Trudeau government set a 100 per cent tariff on Chinese EVs. Prime Minister Mark Carney, following a trip to China in January, agreed to lower the tariff to 6.1 per cent.

Here's what you need to know about the Canada-China deal on EVs and canola

Carney's deal would allow the import of 49,000 Chinese EVs annually, with a maximum six-month quota of 24,500 cars. The plan is to increase that allowance to 70,000 cars over five years.

A clause in the agreement stipulates that half of the quota will be reserved for vehicles under $35,000 Cdn.

Data from Global Affairs Canada shows that more than 3,500 Chinese EVs made their Canadian debut in May, under the new tariff rate. The majority of those were reportedly Teslas made at its Shanghai factory.

The Lotus Eletre, manufactured by China's auto giant Geely, was part of the first shipment of Chinese EVs to arrive in Canada. It was also shown off in Old Montreal during a media presentation earlier this month.

According to Charette, the Lotus Eletre has a base price of $129,000 — “which obviously isn’t the kind of affordable vehicle consumers have been hoping for," Charette said in an interview with Radio-Canada Wednesday morning.

Lotus reportedly plans to open a half dozen Canada dealerships this year — just to sell a few hundred cars, Lotus CEO Feng Qingfeng said in an interview.

Meanwhile, China’s national champion BYD, now the world’s largest EV maker, is planning to open six dealerships in Canada, an advisory firm scouting locations for BYD told Reuters. BYD has also started compliance procedures to import two passenger cars to Canada, regulatory records show.

As for why Dongfeng is launching in Quebec, Charette believes it's because the province is the most attractive market to electric vehicle makers.

"Consumers here are already familiar with electric vehicles. We also have inexpensive electricity, which makes EV ownership more appealing," Charette said.

"There's a high level of public awareness and acceptance of electric vehicles in Quebec, and Dongfeng knows that. So they're beginning their Canadian expansion in a market that's already receptive to these products."

After its launch in Quebec, Charette said the Chinese automaker would expand into British Columbia — the second most attractive market for companies making electric vehicles — followed by Ontario.

These Chinese automakers’ aggressive moves into Canada come despite the meager prospects for sales and profits here anytime soon.

Canada is believed to offer something far more valuable, though: The perfect beachhead for what many industry experts view as the inevitable invasion of Chinese cars into the United States, despite current U.S. Policies effectively banning them.

Canada offers more than proximity to advance Chinese automakers’ U.S. Ambitions. Unlike Mexico, where cheaper cars rule, Canada’s car market is almost identical to the United States in consumer tastes and industry regulations.

“Canada is the practice run for the U.S.,” said Robert Kerwal, director of automotive solutions at JD Power Canada.

The only major difference is market size: 1.9 million cars sold last year in Canada, compared to more than 16 million in the United States.

Trump administration officials have said that Canada would regret its deal with China, and said the cars would not be allowed to enter the United States.

For Chinese automakers, markets like Canada are more important than ever

Canadians are ready for Chinese-made autos, but experts note there are security risks

Canada's big three automakers — Ford, General Motors and Stellantis — said in an earlier statement that the entry of these EVs "undermines" the domestic auto industry and opens Canadians up to "cyber risks."

"China does not adhere to many of the rules-based trade and investment principles that have been fundamental to the success of the auto industry and the Canadian economy," Brian Kingston, president and CEO of the Canadian Vehicle Manufacturers Association, said last month.

On the flip side, Charette pointed out the influx of lower-priced Chinese vehicles may force North American automakers to come up with a solution that allows them to compete.

"The problem," Charette said, "is that — in the short term — there isn't one. For now, we'll be watching this unfold and hoping it doesn't become a tidal wave."

Journalist

---

---