Chinese electric vehicle manufacturer Chery Automobile Co. Ltd. is preparing for a substantial market entry in Canada, reflecting evolving North American trade relations. The Wuhu-based automaker is in the process of assembling a domestic sales infrastructure, actively hiring experienced personnel familiar with Canada’s automotive industry. These recruitment efforts focus on filling strategic positions to support Chery’s sub-brands, Omoda and Jaecoo, as the company lays the groundwork for its Canadian operations from the ground up.
This expansion follows a diplomatic breakthrough spearheaded by Prime Minister Mark Carney, who successfully negotiated a reduction in trade barriers with Beijing. As part of this agreement, Canada has agreed to dramatically lower its previous 100% surtax on Chinese electric vehicles to a reduced rate of 6.1% applicable within an annual quota of imports.
Recruiters working on behalf of Chery have been reaching out to key figures in Canada’s automotive sector via LinkedIn, indicating a clear, sustained commitment to establishing and growing its business presence in the country. Plans include setting up a corporate headquarters in the Toronto metropolitan area to anchor their Canadian operations.
The tariff easing, publicly announced on January 16, allows for the importation of 49,000 Chinese-made electric vehicles each year, with expectations to increase this quota to 70,000 vehicles over the next five years. This market access is part of a reciprocal agreement in which China has pledged to lower counter-tariffs on Canadian agricultural exports such as canola and certain seafood, broadening trade cooperation.
Industry Minister Mélanie Joly has engaged with leadership from both Chery and another Chinese electric vehicle maker, BYD Co. Ltd., during a recent trade delegation to China alongside Prime Minister Carney. Although Western automakers like Tesla and Volvo have been importing China-manufactured vehicles into Canada, Chery stands out as the first indigenous Chinese firm to mount a concerted effort to penetrate the mainstream passenger vehicle segment in the Canadian market.
Market watchers have drawn comparisons between Chery’s carry-in strategy and that of Vietnamese automotive newcomer VinFast, which in 2022 undertook aggressive hiring to quickly establish a foothold in Canada. Chery’s timing appears aimed at leveraging the relaxation of what Prime Minister Carney characterized as previously "unfair" competitive practices, positioning the company to make significant inroads into the North American EV landscape.
Chery Automobile Co. Ltd., a major Chinese electric vehicle producer, is actively recruiting to establish a sales and distribution network in Canada. This move comes after Canada agreed to cut tariffs on Chinese EV imports from 100% to 6.1% within a designated quota, reflecting a broader diplomatic effort to ease trade tensions between the two nations. The initiative includes plans to open a headquarters near Toronto and aims to capitalize on newly available Canadian market opportunities for Chinese-made electric vehicles.
Key Points
- Chery is actively recruiting to build a Canadian sales and distribution network for its EV sub-brands Omoda and Jaecoo, including plans for a headquarters near Toronto.
- Canada has reduced tariffs on Chinese electric vehicles from 100% to 6.1% within an import quota framework, enabling importation of up to 49,000 EVs annually, increasing to 70,000 over five years.
- The tariff reduction is part of a bilateral trade agreement in which China will ease retaliatory duties on Canadian agricultural products such as canola and seafood.
Risks
- The success of Chery’s Canadian venture depends on the effective recruitment of experienced automotive professionals and establishment of a competitive domestic sales operation.
- Changes in trade policy or future tariffs could alter the market dynamics and affect the volume of Chinese EV imports Canada permits.
- Competitor responses from established Western brands and other entrants like VinFast may influence Chery's market penetration and pricing strategies.