China’s Geely Automobile Holdings Ltd. is positioning itself to enter the Canadian automotive market following an agreement struck earlier this year that permits a limited number of electric vehicles built in China to avoid a 100% tariff that had been applied in 2024. Geely is currently waiting on certification from Canadian authorities for vehicles carrying the Geely Auto brand, according to Andy An, chief executive officer of parent company Zhejiang Geely Holding Group Co.
"We’re not only considering the Canadian market, but also Brazil, South America, Eastern Europe and Southeast Asia," An said. "Geely’s globalization is mostly through exports right now, but we will look to localize production." That comment frames the company’s near-term approach as export-led, with future localization a stated objective.
The tariff pathway was created as part of a broader initiative by the government led by Prime Minister Mark Carney to allow Chinese vehicles and related investment to support Canada’s manufacturing sector. In January, Ottawa agreed to exempt up to 49,000 Chinese-built electric vehicles per year from the 100% tariff imposed in 2024. As part of implementing the policy, Canadian officials have signaled openness to investments from China-based automakers, including through joint ventures with Canadian companies.
Other automakers from China have already begun exploring Canada. BYD Co. has said it is actively considering building a plant in the country. Chery Automobile Co. Ltd., identified as China’s largest vehicle exporter, has reportedly started hiring staff in Canada to establish operations there.
Context and next steps
Geely’s immediate requirement is certification from Canadian regulators for its Geely Auto-branded vehicles before any market launch can proceed. Beyond that procedural milestone, the company has articulated a dual approach: continue to globalize primarily via exports while evaluating the potential for local production as conditions and opportunities permit.
Implications for stakeholders
- Automotive manufacturers and suppliers may see shifting trade flows and partnership opportunities if Geely and other Chinese automakers increase activity in Canada.
- Canadian manufacturing and labor markets are potential beneficiaries if joint ventures or localized production materialize.
- Policy and regulatory bodies will play a central role given the need for certifications and the limits embedded in the tariff exemption.