Chery Weighs a Canadian Car Plant — But Ottawa's "Build Where You Sell" Terms Set the Bar
China's biggest car exporter may be about to take its most serious step toward North American manufacturing. Chery Automobile is considering building cars in Canada, executive vice-president Zhang Guibing said in an interview published October 23, 2026 — exploring options that include taking over idle capacity at existing plants and working with partners.
But there's a catch, and it's a big one: any deal must pass conditions set by Ottawa, including majority Canadian ownership. Here's what we know, what the precedents tell us, and why the outcome matters for Canadian EV buyers.
What Chery Is Actually Considering
First, the caveats. Chery has named no companies, no sites, no timeline and no volumes. Zhang Guibing described an early-stage assessment: taking over idle capacity at existing plants, and talking with Canadian investors interested in Chinese automakers — with money potentially coming from several parties, not only from Chery.
Still, the signal is notable. Chery has not yet sold a single car in Canada. Vice-president Charlie Zhang said on October 21 that the company is preparing a brand launch in Canada in early 2027 — a timetable that has already slipped from the fourth quarter of 2026 he projected back in April. And Zhang Guibing was unambiguous about the strategic logic: Canada is, in his words, "a market that is worth having a factory for manufacturing," even without access to the United States.
If it happens, Chery would become the first Chinese automaker with a genuine manufacturing presence in Canada — with one footnote we'll get to below.
The Hard Part: Ottawa's Conditions
Industry Minister Mélanie Joly has laid out the terms clearly, and they reshape what any Chery deal would look like. Before her June trip to China, she stated that any Chinese auto investment must be:
- A joint venture that is majority Canadian-owned
- Compliant with Canadian labour standards
- Built on Canadian parts in the supply chain
- Running secure software that protects drivers' data
Her message to the four Chinese automakers she met — BYD, Chery, Geely and Shanghai Launch Automotive Technology — was blunt: "build where you sell." After the meetings, Joly said all four were willing to explore Canadian-controlled joint ventures with localized supply chains. Any investment also requires her approval as the minister responsible for the Investment Canada Act, the federal gatekeeper for foreign takeovers. Prime Minister Mark Carney has framed the January EV agreement with Beijing as a way to draw "new Chinese joint-venture investment in Canada" and create domestic manufacturing jobs.
No kits allowed
Joly has also ruled out the fastest route. In April, she rejected a plan by Stellantis to assemble Leapmotor EVs from kits shipped from China at its idled Brampton, Ontario plant. "We can't bring cars in a kit to Canada," she told reporters, insisting that production must support the local supply chain.
That rejection matters for Chery's plans: screwdriver plants won't fly. Whatever Chery builds in Canada must be a real manufacturing operation with real local content — closer to the structured joint ventures Ottawa is demanding than to the kit-assembly shortcuts seen elsewhere.
The Precedent: Lessons From Chery's Rosslyn Playbook
Chery has used the idle-plant route before, and the South African case shows both how it's done and how slowly it moves. In January 2026, Chery SA agreed to buy Nissan's Rosslyn factory and a nearby stamping plant, retaining most of the plant's 692 employees on similar terms. The restarted plant officially opened on July 3, 2026, with Zhang Guibing among the executives at the ceremony.
The timeline is instructive:
- Production starts only in mid-2027 — a year and a half after the purchase agreement
- 15,000 units planned for the initial ramp-up
- 50,000 vehicles per shift at full annual capacity
- 40% parts localization targeted by 2028
- The site is meant to anchor more than 100,000 annual Chery sales in South Africa, where the brand ranked second among passenger vehicle brands this year
Apply that timeline to Canada and even an optimistic scenario puts Canadian-made Chery vehicles years away — which is exactly why the brand launch in early 2027 will rely on imports for now.
The Real Opening: Canada's Import Quota
In the near term, Canada's opening for Chinese brands is not a factory — it's the import quota. Since March 1, 2026, up to 49,000 China-built EVs per year can enter Canada at a most-favoured-nation tariff of just 6.1%. According to the Global Affairs Canada report updated October 23, 15,931 permits had been used and 33,069 remained, with 328 recorded in September and none so far in October.
The quota covers every brand that builds EVs in China — not only Chinese ones. A Nissan spokesperson told a Canadian outlet earlier this year that the deal's limits and its first-come, first-served permits made it difficult to plan a product line around China-built cars. For Chery, that means the first Canadian wave will almost certainly be imported EVs competing for quota room, with local manufacturing a longer-term play.
Why Canada Is Worth a Factory — Even Without the U.S.
The strategic puzzle is why Chery would invest in Canadian manufacturing when Washington has said Chinese cars built in Canada will not be allowed to cross the border. A few factors make the math work:
- Canada is a real market. It's roughly the size of Australia's new car market, and Chinese brands currently sell zero cars there — greenfield opportunity.
- Local manufacturing beats tariffs. A Canadian-built car avoids the import quota entirely and insulates Chery from future trade policy shifts.
- The door to the U.S. may not stay shut forever. President Trump suggested in September that he might allow a Chinese automaker to build in the U.S. with local workers. Whether Chery would accept a Canadian majority partner as a stepping stone to a broader North American presence is precisely the question Zhang left open.
Washington is watching closely — and so is Chery's competition. BYD has said it is considering a Canadian plant (in late August, Brampton's mayor even said BYD had asked about building buses at the idled Stellantis factory, though his office later walked that back), and Geely is due to start selling cars in Canada next year without committing to manufacturing.
About that "first Chinese automaker" footnote
Reports have called Chery's plan potentially the first Chinese automaker manufacturing presence in Canada. Technically, BYD built electric buses in Newmarket, Ontario from 2019 — but its entire output was 10 buses for the Toronto Transit Commission, the plant ceased operations after that single order, and the building has since been sold. A Chery car plant would be a different category entirely.
What It Means for Canadian EV Buyers
For Canadian shoppers, the near-term effect is more choice at aggressive prices: Chinese-brand EVs entering under the quota, in a market where affordable electric cars remain scarce. Canadian buyers should also note that Chinese-market vehicles use different plug standards — GB/T — than the J1772 and NACS connectors used in North America, a mismatch that catches out even experienced EV owners when Chinese-market cars travel abroad, as we explained in our guide to Chinese EV charging adapters in the UAE.
Longer term, locally manufactured vehicles would follow North American standards natively. And as the region's charging landscape consolidates around NACS — a transition we examined in whether adapters are still needed as NACS rolls out — any new entrant would plug into the same infrastructure as every other EV on Canadian roads.
Frequently Asked Questions
Is Chery building a factory in Canada?
Chery is considering it. Executive vice-president Zhang Guibing said in October 2026 that the company is assessing idle plant capacity and Canadian partners, but no site, partner, timeline or volume has been announced.
What conditions has Canada set for Chinese automakers?
Industry Minister Mélanie Joly requires any Chinese auto investment to be a majority Canadian-owned joint venture with Canadian labour standards, Canadian parts and secure software. "Kit" assembly from Chinese components, as proposed by Stellantis for Leapmotor, has been rejected.
Can Chinese EVs be sold in Canada now?
Yes, within limits. Since March 1, 2026, up to 49,000 China-built EVs per year can enter Canada at a 6.1% most-favoured-nation tariff under a first-come, first-served permit system. Chery plans a Canadian brand launch in early 2027.
Would a Chinese automaker be the first to build cars in Canada?
Almost. BYD assembled 10 electric buses in Ontario from 2019, but that plant closed after the single order. A Chery car plant would be the first Chinese passenger-car manufacturing presence in Canada.
