A drone view shows BYD electric vehicles before being loaded onto the BYD Explorer No.1 roll-on, roll-off vehicle carrier for export to Brazil, at the port of Lianyungang in Jiangsu province, China on April 25.China Daily CDIC/Reuters
Chinese electric-vehicle manufacturing giant BYD Co. expects to enter the Canadian market, according to a filing with a federal regulator – a development that comes as Ottawa contemplates trade action against made-in-China EVs.
Chinese brand vehicles aren’t selling in Canada yet and could face challenges obtaining vehicle-safety standard certification for products, but their biggest potential obstacle may be tariffs under consideration by Ottawa that would significantly reduce any cost advantage for these imports.
Government-relations consultants working for BYD Canada Co. Ltd. filed notice with the federal registry of lobbyists in July that they are talking to Ottawa “to advise the government of Canada 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.”
BYD already sells electric buses in Canada.
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This filing by public affairs agency Crestview Strategy also said BYD wants to talk to the Canadian government about “the application of tariffs on EVs,” a request that comes as Deputy Prime Minister Chrystia Freeland is considering proposals to impose significant duties on Chinese-made EVs.
Ms. Freeland’s announcement follows massive tariffs imposed on Chinese EVs by the United States and European Union. The U.S. applied a 100-per-cent tariff and the EU up to 37 per cent.
Ottawa is looking at a surtax, Ms. Freeland has said, because Chinese vehicles are being overproduced and flooding global markets. Such a measure, however, would be at odds with Prime Minister Justin Trudeau’s goal of encouraging EV adoption by Canadians.
While China doesn’t sell its own brands in Canada yet, it manufacturers electric and combustion-engine vehicles for Western automakers, including Teslas, Buicks, Volvos and Lincoln models.
Neither Crestview Strategy nor BYD immediately responded Tuesday to requests for comment.
The lobby registry filing on behalf of BYD was earlier reported by autonews.com.
The Alliance for American Manufacturing warned in a February, 2024, paper that government-subsidized Chinese EVs “could end up being an extinction-level event for the U.S. auto sector.”
Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, said BYD’s strategy for new markets relies on low prices.
“BYD, unlike Tesla or other Western-based automakers, uses lowest price points as their main entry strategy into new markets,” he said. “BYD’s competitive advantage is the dramatically subsidized cost structure and supply chain that China first deployed to collapse the West’s electronic goods sector.”
However, Mr. Volpe said BYD would have to fashion an EV that meets Canadian safety standards and obtaining approval for roadworthiness could take several years. Plus, he said, the challenges of setting up servicing – maintenance and repair – are difficult for any auto brand.
But he said the fact BYD is planning to enter the Canadian market demonstrates the need for tariffs on Chinese-made EVs to level the playing field for the domestic auto market. Mr. Volpe said BYD, like many Chinese automakers, enjoys significant support from the Chinese government.
“They benefit from central government planning for market share,” he said of BYD.
If the least expensive Chinese-made EV is about US$15,000, Mr. Volpe said, then a 100-per-cent tariff – as the U.S. has already imposed and Canada is considering – would bring the total price to more than $40,000 for Canadian consumers.
An auto industry source said that they heard representatives for BYD were in Windsor, Ont., last week talking to potential parts suppliers. The Globe is not identifying the source because they were not authorized to publicly share this information.
BYD has already entered the Mexican market. In May it unveiled the Shark, a mid-size hybrid-electric pickup truck, and its regional chief brushed off new U.S. tariff hikes on Chinese EVs, saying the company was not eyeing an entry to the U.S. market.
The Shark strengthened BYD’s foothold in the North American market with a vehicle aimed directly at incumbents Ford, General Motors and Toyota.
It was the first time the world’s largest electric-vehicle company has launched a new product outside its home country.
BYD chose Mexico because of the rapid growth in demand for pickup trucks in the country, Chief of Americas Stella Li said.
In an interview with Reuters, Ms. Li said the U.S. tariff hikes have no impact on BYD, which plans to build a plant in Mexico.
“We don’t have plans to go to the U.S. market, so this announcement does not impact us at all,” Ms. Li said.
“When we build a Mexican plant, we only consider the Mexican market and other countries’ markets, we have not considered the U.S.,” she added.
With reports from Reuters and Associated Press