Flavio Volpe is a leader in Canada’s auto-parts industry. Here, he’s talking about what Chinese EV companies are doing—whether they’ll build cars in Canada or use existing factories.
BYD is a big Chinese car company, especially known for electric vehicles. The host is saying BYD is considering building cars in Canada instead of only importing them.
A quota system is a cap on how many cars can be brought into a country. In this segment, Canada’s quota for Chinese EVs is described as encouraging companies to build cars locally if they want to sell more than the allowed number.
This is an automotive industry conference series in Michigan where people discuss car-industry policy and business decisions. In this episode, it’s where speakers argued for Canada’s auto industry.
Michigan is a key U.S. state for car manufacturing and suppliers. The podcast mentions it because the conference speakers were making arguments that affect the whole North American auto industry.
This is basically a “who makes what” argument. The speakers are saying North America needs Canada’s auto industry to stay competitive with China, because production capacity and supply chains matter.
Tariffs are extra taxes on imported products. If the US adds tariffs on cars or parts, it can make them more expensive and can push companies to change where they build vehicles.
This means more competition from carmakers in China. If their cars or parts are cheaper, it can make it harder for Canadian production to stay competitive.
It means the government has rules that don’t all match each other. For car companies, that can make it harder to plan where to build and what to invest in long-term.
These are different kinds of government rules: how manufacturing is supported, how clean vehicles must be, and how imports/exports are handled. When they don’t work together, car companies may hesitate to invest locally.
“Connected retail” is a dealership technology approach that links customer-facing steps (like online inquiries and messaging) with internal dealership workflows. The goal is to reduce friction—so customers don’t get bounced around or asked the same questions repeatedly.
Keyloop is a company that makes software for car dealerships. In this segment, they’re pitching a tool meant to make the sales process smoother and reduce customer back-and-forth.
The Toyota Prius is a car that uses both a gasoline engine and an electric motor to help save fuel. It became well known because it was one of the early mainstream hybrid cars. The podcast mentions it as a major model Toyota introduced around the late 1990s.
A hybrid powertrain is a setup that uses both a gas engine and an electric motor. It helps the car use less fuel by using electricity part of the time and recharging while slowing down.
“Electrified” just means the car uses electricity in some way to help power it. In this context, it includes hybrids, plug-in hybrids, and fully electric cars.
Plug-in hybrids are cars that use both gas and electricity. You can charge them from a plug, and they can sometimes drive on electricity by itself for a while.
A federal incentive program is money the government offers to encourage people to buy certain cars. It can make EVs or hybrid cars less expensive, which can increase sales.
Provincial incentives are programs run by Canadian provinces to help people afford certain vehicles. If some provinces don’t offer them, EV and hybrid sales can lag there compared with places that do.
A Toyota RAV4 plug-in hybrid is an SUV that can drive using electricity from a rechargeable battery. You can charge it by plugging it in, and when the battery runs low it uses gas like a normal hybrid.
Electrification means moving away from gas engines and toward electric power. It can include fully electric cars and also cars that use both gas and electricity.
Multi-pathway means a company tries more than one type of powertrain instead of betting everything on just one. It’s a way to reduce risk when rules and customer preferences are changing.
Regulatory changes are new government rules that can force car companies to adjust what they build. If the rules push lower emissions, companies may move faster toward electrified cars.
Capital intensive means it costs a lot of money to do. Building lots of different vehicle types usually requires big investments in factories, engineering, and new technology.
The Toyota Grand Highlander is a bigger SUV designed for families, with room for more passengers. It’s meant for everyday driving plus carrying people and cargo. The podcast brings it up as a newer model that’s been doing well recently.
A conventional hybrid uses both a gasoline engine and an electric motor, but it doesn’t plug in to recharge the battery. Instead, the battery is replenished through regenerative braking and the engine, so the car relies on gas for most driving.
The Toyota CHR is a small Toyota crossover. In this discussion, it’s mentioned because Toyota is trying to keep pricing competitive compared with cheaper electric cars.
The Chevy Bolt is an electric car from Chevrolet. It’s mentioned because it’s an example of a relatively affordable EV compared with newer, more expensive options.
A monthly payment is what you pay every month to finance or lease the car. The point here is that people often choose based on what fits their budget each month.
Sticker price is the advertised price on the car. But what you end up paying (especially with financing) can be different, and your monthly costs matter too.
Positioning is how a company presents a car to buyers—what it’s meant to be and who it’s for. The host is saying the early message didn’t connect, but later it got better.
The Toyota BZ4X is Toyota’s electric SUV/crossover. The hosts are saying that even before it was sold, many Canadians already wanted to buy a Toyota EV.
A battery supply chain is everything required to get batteries made and delivered to car factories. The question here is whether Toyota can reliably source and build the batteries needed for more plug-in vehicles in Canada.
They’re saying most of the cars built in Canada are shipped to the U.S. That matters because it changes how Toyota plans investments and production changes like making more plug-in hybrids.
USMCA is a trade deal between the US, Mexico, and Canada. It includes rules about how much of a car has to be made with parts from North America for the car to qualify under the agreement.
“North American content” means how much of the car (or its parts) comes from North America. The more of those parts that are made locally, the easier it is for the car to meet USMCA rules.
To “localize” batteries means making them in North America instead of importing them. The idea is that if batteries are made locally, it becomes easier for the car to qualify under the trade rules and be built in Canada.
A “joint venture partnership” means two companies team up to build and run something together. In car manufacturing, it often helps a company produce cars in a country and work with local rules and suppliers.
Concept
trading relationship
A “trading relationship” is how two countries handle buying and selling with each other. For cars, it can change the cost and ease of bringing vehicles across the border.
Concept
North American automotive industry
“North American automotive industry” means the car-making business across North America. Collaboration usually refers to agreements that affect where cars and parts are produced and shipped.
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Hi, everyone, and welcome to the June 19th,
2026 episode of the Automotive News Canada podcast.
I'm your host, Greg Lason, the digital and mobile editor
at Automotive News Canada.
Coming to you from just outside Windsor, Ontario,
the automotive capital of Canada.
Today on the show, we hear from Toyota Canada
Director of Corporate Strategy and External Affairs,
Scott MacKenzie.
He recently sat down in Quebec City
with Automotive News Canada publisher Tim DiMopolis
to talk about Toyota's electrification road map,
the automaker's multi-power train approach,
making more cars in Canada affordability,
the USMCA, and more.
But first, to look at some of the top Canadian automotive
stories of the week.
China's biggest automakers are seriously considering
building vehicles in Canada.
That's according to the head of the Automotive Parts
Manufacturers Association.
Flavio Volpe says companies such as BYD, Geely, and Cherry
are in active discussions about opening assembly plants
or taking over idle factories.
Volpe says Canada's quota system for Chinese electric vehicles
is working as intended.
It's pushing automakers to invest locally
if they want to expand sales beyond that limited number
of imports.
Sticking with manufacturing for a moment,
Canada's auto industry received strong support
from American lawmakers and industry leaders
at a major automotive conference this week.
Speaker after speaker at the Center for Automotive
Research Management Briefing Seminars in Michigan
made the case for Canada.
All of them argued that North America
cannot compete effectively with China
without a strong Canadian auto sector.
Michigan Congresswoman Debbie Dingle called Canada
a vital partner and said treating the country
like an enemy is unacceptable.
Industry leaders also warned that weakening Canada's
auto industry ultimately hurts American workers
and suppliers.
Finally, in tariff news, Honda Canada
is warning that US tariffs, Chinese competition,
and conflicting government policy
could gradually erode Canada's auto industry.
Honda Canada CEO Dave Jamison says the company
built more than 400,000 vehicles in Ontario last year
and remains at full capacity.
But he warned future production could shift elsewhere
if Canada becomes less competitive.
He says prolonged tariffs and poorly aligned
industrial, environmental, and trade policies
are putting Canada's long-term manufacturing future at risk.
That's a look at some of the top Canadian
automotive stories of the week.
You can find more on those and other stories
at our website, automotivenews.ca.
Coming up we hear from Toyota Canada
Director of Corporate Strategy and External Affairs,
Scott McKenzie.
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Welcome back to the Automotive News Canada podcast.
I'm your host, Greg Lason.
We'll now hear a conversation
between Automotive News Canada publisher Tim Domopoulos
and Toyota Canada Director of Corporate Strategy
and External Affairs, Scott Mackenzie.
So Scott, Toyota has a long history of electrification.
Tell us about that and the current state
of global electrified sales for the brand.
Going back to the mid 1990s,
even before we became known for hybrid vehicles,
we made a RAV4 electric vehicle.
I think it was 1995 or 1996.
Didn't sell a lot of them.
It was just an initial project that we had.
And shortly after that in 1999, we brought out the Prius.
And we're known for the Prius.
The Prius was the beginning of hybrids for us.
And later on, we started to migrate hybrid powertrains
across our entire lineup.
And now this year, I think we'll have 21 products for sale
under the Toyota brand in Canada that are electrified
in some way, whether it's hybrid, plug-in hybrid
or battery electric.
And over the years, we've added plug-in hybrid.
We did that in 2012 in Canada.
And we now have a couple of plug-in hybrid models
under the Toyota brand.
And more recently, battery electric models.
So today, we've got three battery electric vehicles
for sale in Canada.
And we'll be bringing a fourth,
the new all electric Highlander.
We'll be for sale later this year.
And just this past month in May, 70% of our sales
in the month of May in Canada were electrified,
meaning they were either hybrid, plug-in hybrid
or all electric.
And then when you look out globally,
it does vary by markets.
If you look at places like Japan, China, Western Europe,
you're seeing higher rates of electrification,
some other areas are lower.
But generally speaking, we see an increase
of electrification everywhere.
And depending on the market, it could be centered more
on hybrids or plug-in hybrids or BEVs.
In our case, we've got all three.
Now in Canada, since the first Prius made its debut,
how many vehicles have you actually sold
in terms of just total volume or total numbers?
For hybrids?
For electrified vehicles.
Electrified vehicles were over 600,000 in Canada
since we first brought out the Prius,
which was 2000 in Canada, the year 2000.
Now let's talk a little bit about the regional differences.
There's obviously regional differences
when it comes to electrification between BC and Quebec.
But do you see that changing now
that we have the federal incentive program back?
Despite the lack of provincial incentives
in most other provinces, do you think we'll ever get
to a time where that number becomes a little bit more
dispersed against where the markets actually are
from a population standpoint?
I think you'll see some changes in some markets in Canada,
but not all of them.
So British Columbia and Quebec, the populace,
I think is more geared towards, I'll say, electrified products.
They've been more popular here for a long time,
and they remain very popular here.
In places like Ontario, we have an improved supply
of electrified products, specifically with battery
electrics and plug-in hybrids.
So I think you'll see those sales increasing in Ontario.
But some of the other markets in Canada,
Western Canada, Alberta, Saskatchewan,
we do really well with hybrids there.
I think battery electrics and plug-in hybrids
are a little bit less popular.
They are improving, but you don't have the same uptake
that you would have like here in Quebec.
So for instance, this morning we talked about
the RAV4 plug-in hybrid, and we expect that to be about
25% of our sales in Canada, which is a huge increase
over the previous generation, but in Quebec,
we're expecting that to be about 40%.
So there's still greater penetration
in British Columbia and Quebec.
Part of that is because of policy,
so they have provincial incentives available
that stack on top of the federal incentives,
but part of it is just the populace is more inclined
towards increasing levels of electrification.
For me, one of the most striking things about Toyota
is when you look at the product lineup, it's expanding,
and you look at other manufacturers,
and they're rationalizing their product lineups,
they're focusing more on their core vehicles
rather than creating new segments.
They're choosing a pathway when it comes to power trains
rather than going full multi-pathway.
Like Toyota's, your multi-pathway approach
still makes sense, and does offering more product
rather than focusing on the core products
make sense in given all the regulatory changes
in the market in the US, which is a big market globally,
and also in Canada.
I can understand the approach of other automakers right now
where they're maybe reducing the number of offerings
or concentrating on specific technologies,
because honestly, it's very expensive
to diversify your lineup as much as we have.
It's really capital intensive to do that.
We're in a pretty good position financially as a company
where we can afford to do that,
but because we can afford to do that,
we take the approach that the best solution
to uncertainty is diversity.
So you mentioned the regulatory environment in the US.
That's been true in Canada as well,
if you look at some of the policy changes
over the last couple of years,
but it's very difficult to plan at the moment.
Part of that is because of regulation,
but part of it is also because of the environment
we're in right now with tariffs.
The market environment's really uncertain,
but that reinforces our approach that,
if you have the full suite of solutions, you can pivot
if the market goes one way or the other,
whereas if you're concentrated on one technology,
it becomes really, really hard to do that.
But at some point, if let's say we're in a situation again
where EV demand craters because the incentives go away
or something happens where the market further sours
on electrification or at least electric vehicles,
is Toyota prepared to make choices
when it comes to their multi-pathway approach
to fine tune it and make it a little bit more in tune
with market realities?
If you look at some of the products we have
in the marketplace today, as an example,
we mentioned the all electric Highlander
that we'll be bringing to market later this year.
And we get asked the question a lot about Highlander
because we, in bringing out this version of the vehicle,
we stopped making the gas and hybrid versions
of the Highlander, but at the same time,
we've brought out the Grand Highlander.
In the last couple of years, it's doing really, really well.
Honestly, the sales of Grand Highlander are better
than the previous version of the Highlander.
And now we've got an all electric Highlander
and a Grand Highlander that's both gas and hybrid
and they complement each other.
And because of that, if the market goes one way
or the other, we can flex up one way or down the other way,
depending on which direction it goes.
And I think you'll see that approach
with a lot of our vehicles going forward.
And for instance, the RAV4,
which is the top selling on pickup truck in Canada,
is our top selling model.
We have a hybrid version as standard in Canada.
We also sell a plug-in hybrid version.
I could see at some point in time, later down the road,
maybe you have an all electric version of that as well.
But similarly, we can pivot based on allocating
more battery electric versus plug-in hybrid
versus conventional hybrid based on where the market goes.
We have to have the capability to do that.
Speaking about pivots, many manufacturers have pivoted
to offer far more affordable options in the marketplace,
considering the price of vehicles these days,
particularly when you look at BEVs,
they've gotten very, very expensive and out of reach
for many consumers.
And some manufacturers have responded by coming to market
or repricing vehicles that they were planning on bringing
to market to get them to a price point
that is more acceptable, I guess,
from an affordability standpoint.
And I look at the CHR, for instance,
price slightly above what some of the entry-level BEVs
are being priced at from manufacturers like Nissan
and potential Chinese entrants come to Canada,
the Chevy Bolt.
Is there the ability for Toyota to look at its pricing structure,
particularly around its entry-level BEV vehicles,
and make adjustments as the affordability quotient
starts to get even more important?
I think the first thing that we did that I'm most proud of
is we never got out of making sedans.
Some automakers saw reduced profitability with sedans,
and they focused on SUVs, which, to be clear,
are dominating the marketplace right now.
And we're as prevalent with SUVs in the market
as any other OEM, but we didn't get out of making sedans.
And in the last year, especially when you see the impact
of tariffs, not only in Canada, but in the United States
as well, like let's not forget that their manufacturing
in the US is struggling under the tariff burden as well.
We are seeing a higher uptick in sedan sales,
because it's a more affordable option, typically.
I would say it's challenging right now,
just both through regulation and through the market realities,
to make an affordable car today.
When I say regulation, safety systems that are regulated
into cars, they're a great thing.
They're perfect for protecting consumers,
but they are expensive.
And generally speaking, they are making things
more challenging from a cost point of view.
And then you get the tariff environments.
You've got increasing trade friction.
We're likely going into a review
or potentially negotiation of KUSMA.
That could result in more requirements
for localized content.
That's not going to make cars less expensive.
So do we have some flexibility to make adjustments?
Sure, we do.
But part of it is just because of the diversity of options
we have in our lineup.
We can pivot from one to the other.
On an individual model like the CHR,
if it makes sense to do something like that,
we could do that.
But we could also change the marketing of the vehicle.
We could make a lower cost option.
We could pivot that way as well.
Consumers often think about affordability
when it comes to things like their monthly car payment
or price to acquire.
Very few consumers look at total cost of ownership
when buying a car.
And is that kind of an area that Toyota could focus on
just in terms of making the case that buying a Toyota
of long term makes much more financial sense
than buying a competitive model, which may not have the same.
Resale value or reliability down the road.
Toyota is known for quality, durability, and reliability.
And what that means to our customers
is that lower expense over the long term.
Purchased decisions today are primarily made
based on a monthly payment.
It's not even the sticker price of the vehicle.
It's what's my operating cost going to be on a monthly basis
for however long I plan to have this car.
And a contributing factor to that is obviously
how much is the car.
But part of it is also things like insurance.
It could be what's the annual running cost of the car.
Is it all of our cars are covered under warranty.
So are our competitors.
But eventually it could be wear and tear.
It could be insurance costs.
It could be even factors like resale value.
All of those things come into play.
So we can try to control what we can control.
And in our case it's we want our customers
to feel that it's not going to cost them a lot
to maintain their cars over the short to medium term.
Because we feel that they're built well
and they can trust us that they're not going to fall apart.
Let's talk about the BZ.
I had a bit of a rough start when it was introduced
for a number of reasons.
The original name didn't quite roll off the tongue
and there were just some other issues
with positioning and market at the time.
It's had a bit of a renaissance just in terms of positioning
and the market tell me a little bit about what it took
to get it on the radar for Canadian buyers
and what the future holds for it.
The market never lies and the consumers never wrong.
So even as an automaker sometimes we make products
and we're excited about them.
They think they'll do well in the marketplace
and we get told we're wrong.
And with the BZ in particular
it was pretty clear from the feedback
from individual customers in the marketplace in general
that we need to make some changes and we did.
So we changed the powertrain, made it a lot more competitive.
I would say that one of the things that stands out for us
is just our reputation for quality, durability,
reliability which I'd mentioned earlier
and that customers trust us.
And we saw actually opinion surveys
before we even brought its predecessor,
the BZ4X, to marketplace that a high number of Canadians
intended their first EV purchase to be a Toyota
even though we didn't actually make an EV at that point in time.
So we have a lot of I'd say built up trust
with our customers to do it right.
And now we've got that trust paired with
actually a pretty competitive product
and the sales are really, really strong.
Speaking about trust, I think many Canadians
probably trust Toyota for another reason.
That's because you guys make cars in the country,
particularly the RAV4 and among other Lexus vehicles as well.
But the PHEV, a RAV4, isn't made in Canada.
What would it take to start making more vehicles
in this country like PHEVs, like the RAV4, PHEV?
And do we have the battery supply chain set up
in a way that would make sense for Toyota
to invest in making more electric and electrified vehicles here?
I'll start with the RAV4 plug-in hybrid version first.
Making cars in Canada, the reality is more than 80%
of our products get exported to the United States.
It's the largest car market, the world's second largest
to China now, but very huge important market for us.
And we wouldn't be the size we are today
if we didn't have access to that market.
Because of that, we have trade rules that we have to comply to,
and we're part of KUSMA, or USMCA as they call it in the United States,
and it requires a certain amount of local,
local meaning North American content in our cars in order to comply.
And the challenge we have with plug-in hybrids at the moment
is just that we can't make the battery locally,
and it's an expensive commodity,
and it weighs against us when it comes to complying to KUSMA.
At some point, we'll look to localize those batteries to North America,
and at that point it would be actually relatively easy
for us to make that car in Canada.
It's not that it's challenging to make,
it's just we don't have enough localized content in order for it to qualify.
More generally, with electrification and building out battery supply chains,
there's been a number of investments in Canada.
Some of them are moving along, some of them are paused,
for various reasons.
I think the Canadian government's focused on building out battery supply chains here,
and that will only help companies like Toyota
as we move to ever-increasing levels of electrification.
I think the ingredients are here, but we just need to figure out
first how to get some of them out of the ground,
to, or second, to get some of them processed,
and third, to get them into a battery that can go into a vehicle.
So last bonus question, because you know there's always a bonus question,
we talked a little bit about affordability.
Some manufacturers are looking at sourcing vehicles from other countries,
like China, for instance, where they manufacture not necessarily Chinese brands,
but brands like Nissan, for instance,
they announced that they could bring Chinese-made EVs and vehicles into the Canadian market
from their factories.
Is that something that Toyota would consider if it made sense?
We make cars in China.
We make cars in China through joint venture partnerships with Chinese companies.
We've got a lot of experience operating in China,
and frankly we have some very competitive electrified products in China.
It's something that we could look at,
but it's not something that we're planning on at this time.
I feel like that.
It looks like Canada and the United States are having some discussions
with respect to Kuzma and our trading relationship,
and I think it would be a good outcome for all of the North American industry
if we can get to a place where we're working collaboratively together
for the best inches of the North American automotive industry.
And you think we'll get there?
You talk to a lot of people in government.
You talk to a lot of people who are representing us in Canada in these discussions.
You also talk to a lot of your U.S. counterparts.
Do you think we'll see a positive outcome,
or at least an outcome that makes sense for this country and for auto manufacturers moving forward?
I would just say I'm cautiously but increasingly optimistic.
I'd like to thank Scott for his time and Tim for conducting the interview.
If you'd like to be a guest on the show, have a suggestion or simply want to comment,
email me at glasen at AutoNews.com.
And remember, you can listen to all our previous podcasts on Spotify, iTunes, Google Play,
or on our website, automotivenews.ca.
Just scroll to the podcast hub in the middle of the homepage.
And don't forget, you can follow Automotive News Canada on X, where we're at AutoNews Canada.
You can find me there too under at glasen, A-N-C.
Finally, look for us on LinkedIn, just search Automotive News Canada.
That does it for this episode of the Automotive News Canada podcast.
We hope you'll join us next time. So long, everybody.
About this episode
From just outside Windsor, the Automotive News Canada Podcast maps the week’s Canadian auto headlines and then digs into Toyota’s electrification strategy with Scott MacKenzie. The discussion connects EV policy and trade—Canada’s Chinese EV quota, USMCA localized-content rules, and battery supply chains—to what’s selling now: 70% of Toyota’s May sales in Canada were electrified. MacKenzie also breaks down regional mix, Toyota’s multi-powertrain approach, and how incentives and affordability shape product planning.
China brands eye production; the USMCA case for Canada; and Honda’s warning. Plus, Toyota Canada Director of Corporate Strategy and External Affairs Scott MacKenzie on electrification, powertrains, Canadian production, affordability, USMCA and more.
