The American government is trying to keep inexpensive Chinese-built electric vehicles (EVs) out of the U.S. market. But the job is about to get harder.
Already common in Mexico, they are about to come to Canada.
Common in Mexico
Chinese cars are already common across one of America’s borders. Chinese-built cars accounted for about a fifth of new car sales in Mexico last year, Bloomberg reports, “and they’re selling faster than those manufactured in any other country, including Mexico.”
Some Chinese automakers have opened factories in Mexico, causing some policymakers and analysts to worry that the companies are preparing to enter the American market.
North Americans can drive their cars across each country’s borders for short stays, so some Chinese-built cars are already becoming common sights near the U.S. border with Mexico.
One recent study found that many Americans are already familiar with Chinese brands they can’t buy.
Reportedly Coming to Canada
Now, industry publication Automotive News reports, prominent Chinese car builder BYD ”is preparing to enter the Canadian auto market in a move likely to drastically change the complexion of the North American electric-vehicle segment but also attract government scrutiny.”
AN explains, “Public documents filed with Ottawa in late July show lobbyists acting on behalf of BYD registered with the federal and Ontario governments.” The documents say the company has engaged Canadian lobbyists 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.”
It wasn’t clear how fast BYD planned to move in Canada. But the news comes on the heels of a major New York Times exploration of how Chinese automakers can quickly come to dominate a market. The Times explored how Chinese automakers went from having no presence at all to displacing Japanese and American brands in just one year in Thailand.
Canada is a larger market and likely a tougher nut. The country may also try to slow the entry of Chinese automakers. AN notes that the Canadian government is “in the final days of conducting its own review of Chinese state support for automakers that could lead to tariffs” on Chinese cars.
Government Here Fighting the Prospect
The U.S. government has taken several steps to try to restrict Chinese automakers from selling cars in America.
The country enacted a massive 100% tariff that would effectively double the price of any Chinese-built car earlier this year. It has also begun writing new security rules to keep Chinese-derived software out of cars sold in America.
American automakers fear that Chinese companies, heavily subsidized by the Chinese government, can sell cars at far lower prices than they can. American efforts to subsidize the auto industry to compete – like EV tax rebates on cars with few Chinese-derived parts – have been piecemeal and politically controversial.
