When the sprawling Chinese automotive conglomerate Zhejiang Geely Holding Group Co. Ltd. was founded as a refrigerator-parts manufacturer in 1986, factories in Ontario had already been churning out cars for the better part of a century. More than 1.6 million cars rolled off Ontario production lines that year: Honda built its first car in Canada, Toyota broke ground on its Cambridge, Ont., plant, and General Motors and Suzuki announced plans to build a facility in Ingersoll, Ont.
North American manufacturers accounted for about 70 per cent of all new vehicles sold in Canada.
Today, the tables have turned. Canada’s auto manufacturing sector, which has been in a slow, prolonged decline, is staring down an existential threat in the form of crippling U.S. tariffs that are rapidly killing any hope Canada had of grabbing a slice of the once-in-a-generation electric vehicle manufacturing boom.
Geely Auto, meanwhile, sold more than three million cars last year in more than 80 countries. Now – 40 years after it started making refrigerator parts – the Chinese brand is preparing to sell cars in Canada, too.
The influx of Chinese car companies is poised to change everything. Whether that shift is for better or worse remains an open question.
Geely recently became the latest major Chinese automaker to announce a formal plan to enter the Canadian market. Several other Chinese brands – including BYD, Chery and Dongfeng – are setting up Canadian sales operations as well.
“With a Canadian team now in place, Geely Auto is establishing local operations and developing a retail and service network ahead of introducing its first vehicles to Canadian consumers in 2027,” Geely Auto Canada wrote in a statement Friday. The company didn’t give any details on which models it will sell here, or at what price.
Geely’s strategy has a significant operational head start on its competitors. The multi-brand conglomerate already possesses established corporate infrastructure across Canada through its ownership of Volvo, Polestar and Lotus. By leaning into these existing networks, Geely could bypass logistical and real-estate hurdles that BYD, Chery and Dongfeng must establish from scratch.
For Canadian auto workers – who have endured job cuts and plant closures as a result of U.S. President Donald Trump’s all-out attack on the country’s auto sector – the arrival of Chinese automakers could either be a lifeline or the blow that finally kills the sector.
Last year, Ontario produced about 1.2 million vehicles, well below the 1986 total. Japanese automakers Toyota and Honda accounted for the lion’s share of that output, while U.S. brands scaled back Canadian operations, idling factories and cutting jobs.
Geely, meanwhile, has grown exponentially. Some 420,000 of its three million cars sold last year were purchased outside of China. That puts the Geely brand ahead of the BMW Group, which reported 2.46 million global sales in 2025. However, Geely is just getting started. Its parent company, Zhejiang Geely Holding Group, aims to rank among the world’s top five automakers, targeting annual sales of more than 6.5 million vehicles by 2030.
Geely and other Chinese brands are looking to make inroads in Canada following the federal government’s decision in January to lower tariffs to 6.1 per cent from 100 per cent on a limited number of Chinese-made electric vehicles. Imports are capped at 49,000 EVs the first year of the program, rising to 70,000 by 2030.
That’s a drop in the bucket of Canada’s 1.9-million new-vehicle market. But if the cap were removed or raised dramatically, affordable Chinese-made EVs could push out established automakers, including the ones that build cars in Canada.
The federal government is hoping, however, its tariff policy shift will entice Chinese companies to build cars here. It will “drive considerable new Chinese joint-venture investment in Canada,” the Prime Minister’s Office wrote in January.
So far those investments have yet to materialize. If they do, the devil will be in the details. An assembly plant using parts shipped in from overseas, for example, wouldn’t support many local jobs orhelp build the domestic EV supply chain.
At this stage, a Chinese EV factory in Canada seems like a long shot. Chinese automakers already have too much production capacity. Besides, investing in a Canadian plant wouldn’t make financial sense without tariff-free or low-tariff access to the much larger U.S. market.
A worst-case scenario – no Canada-U.S. trade deal, no Chinese investment and no quota on Chinese vehicle imports – would mean certain death for Canada’s century-old car manufacturing industry. It probably wouldn’t even take all three of those factors to kill it.
Canadian consumers, however, will almost certainly benefit from added competition in the EV market. Chinese brands move fast, quickly gaining market share and winning over consumers across Europe, Australia, Mexico and elsewhere. According to market research firm Inovev, Chinese automakers captured a 6-per-cent share of the European car market last year – and so far this year, they have already surged to 10 per cent.
Even the mere threat of new EVs from Chinese companies is already helping to drive down EV prices in Canada.
But it would be a fatal mistake for the government, and for the political feasibility of hitting the country’s climate goals, to sacrifice hundreds of thousands of livelihoods in exchange for more and cheaper EVs. That’s not a just transition to a greener economy and not what Canada signed on to in the Paris Agreement.
Make no mistake, this is a fight for the survival of Canada’s auto manufacturing sector.
Who cares about the auto sector? Every Canadian should. Because the term “auto sector” translates to hundreds of thousands of people, their livelihoods, their ability to pay rent and buy food, and the well-being of their families and communities. It also encompasses a far-reaching supply chain of critical minerals and metals, ancillary industries such as defence, battery production and recycling, and a chance for Canada to secure a slice of the US$1.2-trillion EV boom to build a strong green economy.
Without a competitive auto sector, Canada will be a poorer country.
The worst-case scenario is not inevitable – not yet. But ensuring a thriving Canadian auto sector – and all the jobs that go along with it – will require some deft manoeuvring by the federal government to strike a workable trade deal with the U.S., while balancing the Chinese EV import quota and still attracting the right kind of Chinese auto investments. There is a window, but it’s closing.
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