NEW FACTORIES? AUTO ANALYSTS SUGGEST WINDSOR COULD BE WINNER IN CANADA-CHINA EV DEAL
It’s a long road ahead, but some auto sector analysts suggest Canada’s electric vehicle deal with China could eventually lead to the construction of new auto and battery plants, perhaps in Windsor-Essex.
And they appear to have little concern that the new deal announced by Prime Minister Mark Carney during his visit to Beijing — to allow annual imports of 49,000 Chinese-manufactured vehicles into Canada — will hurt Windsor’s existing auto-dependent economy.
Industry analyst Sam Fiorani said that if they get a foothold in the Canadian marketplace, the Chinese automakers will likely need to start building their cars here. Windsor is an obvious place to set up shop.
“Windsor, lower Ontario, is definitely the centre of the automotive industry,” Fiorani, with AutoForecast Solutions, told the Star. “That’s where all the suppliers are. That’s where all the manufacturers are. And that’s where you would get the best economies of scale when you’re building a new plant.”
Carney’s China deal has been controversial.
While it’s expected to drive investment, critics worry it could undermine the existing auto sector by providing more affordable foreign-made options for the Canadian consumer.
Ontario Premier Doug Ford continued to blast the agreement this week, saying he and Canadian automakers only learned of the deal after it was sealed.
“I found out about this deal, and the auto companies found out, by the way, a few hours before it was announced — so much for the partnership,” he said during a speech in front of the Rural Ontario Municipal Association’s annual general meeting in Toronto.
In a massive shift in relations between the two nations, which had been best described as adversarial in recent years, Carney announced Friday that the “landmark agreement” will see Canada cut tariffs on Chinese electric vehicles from 100 per cent to 6.1 per cent.
The federal government has said the agreement will drive Chinese joint investment in Canada.
It’s the latest move in Carney’s strategy to find new trade agreements and fortify existing ones outside of North America, as the U.S. becomes less predictable and more aggressive during President Donald Trump’s tariff war.
The Canadian auto industry has been under attack from Trump since he returned to the White House last year. He launched a series of tariffs aimed at yanking the sector out of Canada and installing it all in the U.S.
“While we need some form of a relationship with China as our second-largest trading partner, and to lock in more reliable trading partners than the United States, it is crucial for this deal to have a guardrail in place, to guarantee jobs, and continue to put bread on thousands of tables across Windsor, Ontario, Canada, and the U.S.,” Windsor Mayor Drew Dilkens wrote in an online statement.
“Our supply chains are integrated, continued uncertainty is negatively impacting workers and communities on both sides of the border, and delicate CUSMA renegotiations are coming. Even with a plan to diversify our trade and find partners on the East or West Coast, the U.S. will always be our largest trading partner simply because of proximity.
“We need to find a solid path forward that respects and strengthens that relationship.”
During a visit to a Ford assembly plant in Dearborn last week, Trump said: “We don’t need cars made in Canada.”
“Should Donald Trump follow through with his desire to eliminate automotive assembly in Canada, it’s important that we have backups for that,” said Ryan Donally, president and CEO of the Windsor-Essex Chamber of Commerce.
“Do I necessarily think China is the first and best option? No, but it’s important that we do have these backups. Should this be torn up, and should one day Stellantis leave, should automotive dry up here in Windsor, it’s important to have options.”
There will be an initial cap of 49,000 Chinese EVs entering Canada annually. Fiorani said that’s roughly three per cent of the overall Canadian market. The cap will grow to about 70,000 vehicles over five years.
Ford said he is disappointed in the agreement, which would see Canadian auto industry workers compete with Chinese auto workers who make significantly lower wages.
He told reporters at Queen’s Park he had not yet spoken to Carney since the deal was announced and was informed of the trade agreement by Intergovernmental Affairs Minister Dominic LeBlanc.
“I’m disappointed, we had such a great relationship, and I look forward to continuing a great relationship,” said Ford. “But it’s all about communication, collaboration and partnership, they keep preaching it — at least I know where I stand now.”
About 50 per cent of the foreign-made vehicles are expected to be at an import price of less than $35,000.
“I can assure you, this is not a good move, but I’ll never apologize for standing up for our auto workers, and I will continue doing everything I can to protect their jobs and paycheques, including pushing the federal government to do the right thing,” said Ford.
Fiorani said these cars will not compete with Windsor-made products, such as the high-end Dodge Charger Daytona Scat Pack EV or the batteries made at NextStar Energy plant for more expensive vehicles.
“The likelihood that it’s going to affect Windsor at all is nil, because they’re focusing on low-end, low-price vehicles,” said Fiorani.
“We’re looking at half the price of a Charger.”
In exchange for lowering the EV tariffs, Canada gained big wins for the Prairie provinces and coastal communities. China will reduce its tariffs on billions of dollars of canola products from 84 per cent to 15 per cent by March. China will also eliminate tariffs on Canadian canola meal, lobsters, crabs, and peas until at least the end of 2026.
China inflicted painful retaliatory levies after former prime minister Justin Trudeau imposed the 100 per cent tariff on Chinese EVs in October 2024, which aligned with the tariffs set by former U.S. president Joe Biden.
Trudeau argued at the time that the relatively cheap Chinese vehicles, which are heavily state-subsidized, were a threat to Canada’s fledgling EV industry.
But the demand for EVs has slumped — another reason for Windsor-Essex not to worry, according to Donally, who said there has been “a pretty clear movement” away from EVs in North America.
“If the electric F-150 was selling two million, three million vehicles a year, they’d be making those vehicles,” he said. “The minute that the mandate was gone from Canada, and especially United States, to build these vehicles, the companies that were producing them said, ‘We’re not building them anymore, thanks but no thanks.'”
Stellantis told the Star last week that given the lack of demand for EVs, an all-electric version of the Windsor-made Chrysler Pacifica is low on the priority list. The company also stopped production of its base model Dodge Charger Daytona EV in Windsor, though it still makes the Scat Pack.
NextStar Energy, Windsor’s new $6-billion EV battery plant, has also pivoted.
Representatives of NextStar, a joint venture between Stellantis and South Korea-based LG Energy Solution, declined to comment on the China agreement.
But the company announced in November that, until the demand for EVs increases, it is shifting gears to make energy storage system (ESS) batteries, which are large-format, rechargeable units used to store electricity for later use.
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Fiorani said the demand for electric vehicles will likely bounce back starting next year as manufacturers zero in on what people want and what they’re willing to pay.
When that happens, and if the Chinese vehicles catch on, southern Ontario will likely see a new plant pop up, he predicts.
“Once brands get established, they’re going to have a model up from whatever they bring in here,” said Fiorani.
“That one could probably be built locally. We’ll see the midsize, mid-priced vehicles coming in and being built locally once whatever brands come in are established.”
— With files from Postmedia News
2026-01-21T12:18:20Z