Chinese EV manufacturer BYD is exploring options to enter Canada, in a move that could potentially transform the North American market.

The automotive industry in the region has been wary of Chinese competition, which is scaling up at pace globally and threatens Western brands with its cheaper, ever-improving models. Indeed, BYD last year became the world’s top-selling EV maker, overtaking Tesla. 

Ottawa will soon close a public consultation on whether to apply tariffs on EVs made in China, potentially following the footsteps of the US’s 100% tariff hike on Chinese EVs taking effect soon.

Last year, Canada imported CAD 2.2 billion ($1.6 billion) worth of Chinese-made EVs, most of which were Tesla Y models produced in Shanghai. BYD would become the first fully Chinese brand to enter the Canadian market.

The spectre of tariffs is not deterring BYD, which hired consulting firm Crestview Strategy to lobby the Canadian government. Earlier this month, they sought “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, and the application of tariffs on EVs,” according to a regulatory filing.

The Shenzhen-headquartered company met with Canadian dealers to discuss setting up local dealerships, Automotive News reported. In the region it already has a presence in Canada, where it has been rolling out electric buses and building a production plant, and in Mexico, where it is planning a factory that would generate 10,000 jobs and launched its first pickup truck in May, the BYD Shark.

According to Joseph McCabe, president and ceo at AutoForecast Solutions, Mexico and Canada are "a port of entry" for BYD to access the North American market, as going through a US state would be "very politically polarising."

"What the Chinese want in North America is market share, and they will sacrifice profitability in order to obtain that. So if they get hit with a massive tariff, they'll probably just consider that to be a hurdle, not a barrier of entry," McCabe tells Kallanish.

"They want to come in with an inexpensive or a competitively priced EV to go against locally, domestic-built vehicles, but it's still hugely polarised," he adds. "They may not have immediate success, and it's not going to be overnight, obviously, but China's always been in it for the long game."