Minister Joly Seeks Chinese EV Investment in Key Shanghai Meetings
Industry Minister Mélanie Joly says she will be meeting with four Chinese companies that are considering building electric vehicles in Canada when she visits China this week in an effort to attract investment to this country’s auto sector.
The four companies – BYD, Chery, Geely and Shanghai Launch Automotive Technology – have been examining possible investments in Canada, Ms. Joly said in an interview. Shanghai Launch’s proposal includes a partnership with British automaker Austin Motor Co., she added.
Ms. Joly is due to arrive in China Monday for a four-day visit that will begin in Shanghai. She will visit BYD’s manufacturing base in Changzhou, west of Shanghai, as well as Shanghai Launch’s Wuxi location. After that, she will meet with Chery, and visit Geely’s Shanghai research and development centre.
She said she wants to see Canadian companies engaged in contract manufacturing for Chinese EV makers in Canadian factories or plants. Ms. Joly noted that a subsidiary of Magna International is doing this for China’s Xpeng in Austria.
This is the latest effort by the Carney government to save the Canadian auto industry as it faces an uncertain future because of protectionist United States trade policy. However, the move risks further irritating the U.S. during sensitive negotiations on the renewal of the trilateral United States-Mexico-Canada Agreement, which governs continental trade.
Ms. Joly said her mandate is to safeguard Canadian auto sector employment and adjacent jobs, which number roughly 500,000, including not only auto parts and auto assembly employees, but also workers in logistics, automation services and professional services, as well as automotive-centric tooling, and the specialized equipment, software and machinery engineered exclusively for designing, building, assembling and maintaining vehicles.
“What is important is how can we make sure that we offer great vehicles to Canadians that are actually affordable, and with the latest technology, while keeping and protecting our 500,000 auto workers,” Ms. Joly said. “My job is to square that circle, and the Prime Minister has given me the mandate to really be able to work with the sector and work with the Chinese automakers.”
In April, the Industry Minister rejected Stellantis NV’s plan to assemble electric cars with kits shipped from China at the automaker’s idled factory near Toronto.
Stellantis had proposed assembling cars made by Leapmotor, its partly owned partner in China. “We can’t bring cars in a kit to Canada,” Ms. Joly told reporters at the time. The plant’s production “needs to support the local supply chain.”
Ms. Joly said her four previously announced conditions for Chinese EV manufacturing investment in Canada will remain unchanged during talks with automakers this week. Under her four-part criteria, any investment must be a joint venture that is majority Canadian-owned and adheres to Canadian labour standards. The vehicles must use Canadian parts, and their software must be secure and safeguard users’ data.
The federal government has been repairing ties with China as it seeks to reduce dependence on U.S. trade. Any investment by Chinese automakers in Canada requires approval by the federal industry minister.
However, a Chinese investment agreement in Canada’s auto sector is bound to upset the Trump administration. In January, United States Trade Representative Jamieson Greer criticized Canada’s decision to allow some Chinese EVs to sidestep steep tariffs originally designed to keep them out of Canada. Mr. Greer called this “problematic” and suggested Canada would ultimately regret it.
Prime Minister Mark Carney broke with the United States and reached a deal with China in January to scale back 100-per-cent tariffs on Chinese-made electric vehicles in return for Beijing sharply reducing retaliatory levies on canola products and other agricultural shipments from Canada.
Back in 2024, Canada and the U.S. both applied 100-per-cent tariffs to Chinese-made EVs on the grounds that the vehicles were subsidized, overproduced and flooding global markets.
But a rupture between Canada and the U.S. on car manufacturing has forced Ottawa to rethink its auto policy. U.S. President Donald Trump last year imposed protectionist tariffs on imports of cars manufactured in Canada and suggested the United States doesn’t need Canadian-made autos. The future of U.S.-bound exports is tied to the negotiations on renewing the USMCA.
Ms. Joly said Canada is in talks with the European Union about exporting Canadian-made vehicles there. At the same time, China’s biggest automakers are racing to build electric vehicles inside the 27-country European Union – at plants in Hungary and Spain – to sidestep steep EU tariffs that have made Chinese-made imports increasingly uncompetitive.
Ms. Joly’s trip is also focused on expanding Canadian exports to China.
A major contingent of Canadian businesspeople is accompanying the industry minister to Beijing on the second leg of her China visit, which spans Thursday and Friday.
The delegation includes Dominic Barton, a former Canadian ambassador to China and the current chair of mining giant Rio Tinto; Canada Goose CEO Dani Reiss; Olivier Desmarais, senior vice-president of Power Corp.; Cameco Corp. CEO Tim Gitzel; Teck Resources CEO Jonathan Price; CPP Investments CEO John Graham; Sun Life CEO Kevin Strain; and Gordon Fife, CEO of pension fund BCI, among others.
In Beijing, possible meetings on Ms. Joly’s schedule include Han Zheng, vice-president of the People’s Republic of China; Zheng Shanjie, chairman of the National Development and Reform Commission, which directs China’s economic planning; and Li Lecheng, minister of industry and information technology. These meetings have yet to be confirmed, Ms. Joly’s office said.
Ms. Joly then heads to Japan Friday where she will meet with executives at Japanese automakers Honda and Toyota, which together are responsible for about 77 per cent of auto assembly in Canada.
Earlier this month, Japan’s ambassador to Canada defended Honda’s May decision to indefinitely suspend plans for a $15-billion electric vehicle complex in Ontario, saying it reflects a slowing market for EVs rather than any reluctance to invest in this country.
Kanji Yamanouchi, the envoy, said Japanese companies remain quite positive on Canada.
“According to what I am hearing from my industries, Canada has enormous potential for consideration of investment by Japanese companies,” he told The Globe on June 5.
Mr. Yamanouchi also warned the future of Japanese auto investment in Canada depends on the successful renewal of the USMCA, also known as CUSMA.
A significant portion of auto assembly in Canada is for export to the U.S.
Japanese automakers “are doing business. They are not doing charity,” the envoy said.
“The CUSMA is a very, very essential part of the consideration of Japanese businesses in Canada.”
This article was first reported by The Globe and Mail
