March 20, 2026 | The week’s top stories and David Kennedy explains the China EV deal
About this episode
David Kennedy breaks down Canada's new trade deal allowing Chinese-made EVs into the country with a quota starting at 49,000 vehicles in 2026, increasing annually. The episode explores how this impacts the Canadian EV market, pricing thresholds for affordable EVs, and which Chinese brands like BYD, Cherry, and Geely are expected to enter. It also covers dealer interest in representing these brands and the cautious stance of North American automakers. The discussion highlights the evolving competitive landscape and potential market shakeup as Canada opens its doors wider to Chinese EV imports.
EV sales slide; Chery eyes Canada; Sigma expansion. Plus, Automotive News Canada Toronto Bureau Chief David Kennedy explains in detail the Canada-China compromise that sees more China-made EVs on the way to Canada. He also explains the quota limits, who might sell them, and at what cost.
electric vehicles (EVs)
"He's here to break down Canada's economic compromise with China, which will allow China made EVs into Canada at a much reduced tariff rate."
Electric vehicles are cars that run on electricity instead of gas. They help reduce pollution and are becoming more popular as technology improves.
Electric vehicles (EVs) are cars powered entirely or partially by electricity, using batteries instead of or alongside internal combustion engines. They produce zero tailpipe emissions and are a key part of efforts to reduce greenhouse gas emissions in transportation.
zero emissions vehicle (ZEV)
"Canada's zero emissions vehicle sales plunged nearly 40% in January. The drop caps a full year of declines."
Zero emissions vehicles are cars that don't produce any pollution from their engines. They help keep the air clean and are better for the environment.
Zero emissions vehicles (ZEVs) are vehicles that emit no exhaust gases or pollutants from their onboard source of power. This category includes battery electric vehicles and hydrogen fuel cell vehicles, which contribute to cleaner air and reduced environmental impact.
federal incentives for EVs
"Industry watchers point to the end of the federal incentives as the main cause. Those rebates ran out early last year."
Federal incentives are discounts or money back from the government to help people buy electric cars. They make EVs cheaper and more affordable.
Federal incentives for electric vehicles are government programs that offer rebates or tax credits to encourage consumers to buy EVs. These incentives help reduce the upfront cost and promote adoption of cleaner transportation technologies.
provincial payouts for EVs
"Provincial payouts have also been cut sharply, especially in Quebec. A turnaround could be coming."
Provincial payouts are extra discounts from local governments to help people buy electric cars. Different provinces offer different amounts.
Provincial payouts are regional government rebates or financial incentives offered to encourage electric vehicle purchases. These vary by province and can significantly affect EV affordability and sales in different areas.
rebate for qualifying electric vehicles
"Ottawa introduced a new rebate in February offering up to $5,000 off qualifying electric vehicles. Sticking with EV news for a moment,"
A rebate means the government gives you money back when you buy certain electric cars. This makes the cars cheaper to buy.
A rebate for qualifying electric vehicles is a government program that offers a set amount of money back to buyers who purchase eligible EVs. This helps lower the effective purchase price and supports the growth of electric vehicle adoption.
import restrictions
"The move comes as Canada opens that door wider to Chinese EVs by easing those import restrictions. China has already taken steps towards entry by trademarking several brands in Canada."
Import restrictions are rules that make it harder or more expensive to bring cars from other countries into Canada. When these rules are loosened, it becomes easier for foreign cars to be sold here.
Import restrictions are government rules or tariffs that limit or regulate the entry of foreign goods, such as vehicles, into a country. Easing these restrictions can make it easier and cheaper for foreign carmakers to sell their vehicles in new markets.
dealership group
"A newly formed dealership group is making its first moves in Atlantic Canada. Sigma Auto has acquired two Nova Scotia stores, Cumberland Kia in Amherst and Forbes Kia in Bridgewater."
A dealership group is a business that owns several car stores where people buy cars. They can grow bigger by buying more stores or opening new ones.
A dealership group is a company that owns and operates multiple car dealerships, often representing various brands. These groups can expand by acquiring existing dealerships or opening new ones in different markets.
Sigma Auto
"A newly formed dealership group is making its first moves in Atlantic Canada. Sigma Auto has acquired two Nova Scotia stores, Cumberland Kia in Amherst and Forbes Kia in Bridgewater. The company says it plans to grow by targeting smaller markets. CEO Michael McGilvery says the strategy mirrors smaller firms that succeed where larger players don't compete. Sigma Auto is separate from his family century auto group which focuses on bigger urban markets. The new group sees strong growth potential in both dealerships. It's also betting on rising demand for the Kia brand across Atlantic Canada. Sigma Auto says more acquisitions are planned with a focus on Atlantic Canada and possibly Ontario."
Sigma Auto is a new company that owns some Kia car stores in parts of Canada. They want to grow by opening or buying more stores in smaller towns.
Sigma Auto is a newly formed dealership group that has acquired Kia dealerships in Nova Scotia and plans to expand in smaller markets in Atlantic Canada and possibly Ontario. It focuses on areas where larger dealership groups have less presence.
Kia
"Sigma Auto has acquired two Nova Scotia stores, Cumberland Kia in Amherst and Forbes Kia in Bridgewater. The company says it plans to grow by targeting smaller markets. CEO Michael McGilvery says the strategy mirrors smaller firms that succeed where larger players don't compete. Sigma Auto is separate from his family century auto group which focuses on bigger urban markets. The new group sees strong growth potential in both dealerships. It's also betting on rising demand for the Kia brand across Atlantic Canada."
Kia is a car company from South Korea that makes many kinds of cars. People like Kia cars because they are good and affordable.
Kia is a South Korean automotive manufacturer known for producing a wide range of vehicles including sedans, SUVs, and electric cars. The brand has been growing in popularity in Canada and other markets due to its value and design.
automotive retail platform
"This is Automotive News Canada and today I want to tell you about something that's transforming dealership operations from the showroom to the service bay. It's called Fusion, the all-new automotive retail platform from Keyloop."
An automotive retail platform is a computer program that helps car stores run better. It helps with selling cars, keeping track of cars, and helping customers.
An automotive retail platform is a software system designed to manage dealership operations including sales, inventory, customer relations, and service. Such platforms help dealerships improve efficiency and customer experience.
Keyloop
"It's called Fusion, the all-new automotive retail platform from Keyloop."
Keyloop is a company that makes software to help car stores work better. Their programs help with selling cars and fixing cars at the dealership.
Keyloop is a company that provides software solutions for automotive retail, including platforms that support dealership operations from sales to service. Their products aim to streamline processes and improve customer engagement.
cloud-based ecosystem
"Bringing your entire dealership together in one powerful cloud-based ecosystem. Let's face it, most retailers are dealing with systems that don't talk to each other."
It means all the important parts of a car dealership's work are connected online in one system, so everything works together smoothly.
A cloud-based ecosystem in automotive retail refers to a digital platform hosted on remote servers that connects various dealership functions such as inventory, sales, and after-sales services into one integrated system accessible via the internet.
inventory
"Fusion solves that. It connects your digital retailing, inventory, after sales and back office into one seamless platform so your team can focus less on workarounds and more on what matters, the customer."
It's the cars that a dealership has ready for people to buy.
Inventory in a dealership context refers to the stock of vehicles available for sale to customers.
after sales
"Fusion solves that. It connects your digital retailing, inventory, after sales and back office into one seamless platform so your team can focus less on workarounds and more on what matters, the customer."
It's the help and services you get from the dealer after you buy a car, like fixing it or getting parts.
After sales refers to services provided by dealerships after a vehicle is sold, such as maintenance, repairs, and parts support.
quota system
"a wrapped up trade deal, so to speak here. Essentially, what it does is allow 49,000 China-made electric vehicles into Canada under a quota system. It'll step up from there over the next few years."
A quota system is like a limit on how many things can be brought into a country. Here, it means Canada only lets in a certain number of electric cars from China each year.
A quota system limits the number of specific goods, such as vehicles, that can be imported or exported during a set period. In this context, it restricts the number of China-made electric vehicles allowed into Canada annually.
tariff access
"But in exchange, Canada gets basically preferred tariff access to a few trade irritants that mostly canola is the biggest product that Canada has got through the doors in China..."
Tariff access means being allowed to sell things in another country without having to pay extra taxes, so they can be cheaper there.
Tariff access refers to the ability to export goods to another country with reduced or no import taxes, making products more competitive in that market.
import price
"Initially, it sounded like a certain percentage of these EVs would immediately be required to have an import price below $35,000. That doesn't appear to be the case at the beginning... But at the same time, it's important to note that that's an import price, not a retail price."
Import price is how much a car costs when it arrives in a country before extra fees and taxes are added. It's not the price you pay at the store.
Import price refers to the cost of a product when it enters a country, excluding taxes, dealer fees, and retail markups. It is different from the retail price that consumers pay at dealerships.
affordable EV threshold
"Right. So when this was announced, the federal government said 50% of the EVs would need to have an import price of below $35,000 in 2030... In 2027, it starts at 10%. So a pretty low bar there. Then 2028 is 20%. 2029 is 35%. And then by 2030, we get to that 50% affordable EV threshold that Ottawa is going to be requiring."
This means the government wants some electric cars to be cheaper when they come into the country, so more people can afford them.
The affordable EV threshold is a policy target requiring a certain percentage of imported electric vehicles to have an import price below a specified amount, in this case $35,000, to encourage availability of lower-cost electric vehicles.
tariffs on Chinese-made vehicles
"Back in 2024, when these tariffs were put in place on Chinese-made vehicles, Tesla, Volvo and Polestar were the ones shipping Chinese-made vehicles into Canada."
Tariffs are extra taxes you pay when you bring cars from other countries. Canada put these taxes on cars made in China to help local car makers.
Tariffs are taxes imposed on imported goods. The tariffs on Chinese-made vehicles are designed to protect domestic automakers by making imported Chinese cars more expensive in Canada.
BYD
"...three automakers essentially are the ones that are likely to get into the market first, and that's BYD. No surprises there. Cherry, which is the largest exporter of Chinese vehicles actually."
BYD is a big car company from China that makes electric cars. They are starting to sell their cars in new countries like Canada.
BYD is a major Chinese automaker known for its electric vehicles and battery technology. It is one of the leading Chinese brands expanding into international markets including Canada.
Cherry
"...and that's BYD. No surprises there. Cherry, which is the largest exporter of Chinese vehicles actually. They've topped BYD for a year or two. And Geely, which is the parent of Polestar and Volvo..."
Cherry is a big car company from China that sells many cars to other countries. They have different smaller brands under their name.
Cherry is a major Chinese automotive brand and the largest exporter of Chinese vehicles. It has multiple sub-brands and is actively expanding its presence internationally, including plans for Canada.
Geely
"...Cherry, which is the largest exporter of Chinese vehicles actually. They've topped BYD for a year or two. And Geely, which is the parent of Polestar and Volvo and a number of Chinese brands."
Geely is a big car company from China that owns other car brands like Volvo and Polestar. They make cars in China and sell them in other countries too.
Geely is a Chinese automotive company that owns several brands including Polestar and Volvo. Besides these international brands, Geely also owns various Chinese homegrown brands and is expanding globally.
Chinese homegrown brands
"...But unlike the Swedish connection on Polestar and Volvos, they've got a lot of Chinese homegrown brands as well that we may see here."
These are car brands that started and grew up in China, not brands from other countries that China owns.
Chinese homegrown brands refer to automotive brands that originate and are developed entirely within China, as opposed to international brands owned or operated by Chinese companies.
Sub-brands
"...You wrote a story not too long ago about one of those kind. I think it was Cherry, trademarking some of their other sub-brands. Do you see anyone beyond those big three players?"
Sub-brands are smaller car brands that belong to a bigger car company. They make different kinds of cars for different people.
Sub-brands are smaller brands or divisions owned by a larger automaker, often used to target different market segments or regions with distinct products.
Market entry and brand survival
"...Analysts say not all of them might live. They might sell some vehicles here. They might establish a footprint for five years, but not make it. So it might not be permanent..."
When a car company starts selling cars in a new country, sometimes they stay for a long time, but sometimes they only sell cars for a few years and then leave.
Entering a new automotive market involves launching vehicles and establishing a business presence. Not all brands survive long-term; some may sell briefly or establish a footprint for a few years before exiting.
Australian automotive market opening
"...The other aspect of it is that a lot of analysts look to Australia, which has got this underway five years ago, that they opened up their market a little bit more. Chinese brands started to enter and five years down the road, they're right at that 20 or so additional brands selling in the country."
Australia started letting more Chinese car companies sell cars there five years ago. Since then, many new car brands have appeared in Australia.
Australia opened its automotive market to Chinese brands about five years ago, leading to a significant increase in the number of Chinese and other foreign brands selling vehicles there, serving as a reference for potential Canadian market developments.
direct sales model
"They tried to go direct sales, thought they knew the market. It turned out they were a little overconfident in what they thought they could achieve."
Direct sales means the car company sells cars straight to buyers without using car dealers. This can save money but might make it harder to get service or support.
The direct sales model is when automakers sell vehicles directly to customers without using traditional dealerships. This approach can reduce costs but may face challenges in service and customer reach.
Chery
"So the expectation going forward for BYD, Cherry and Julie is that they'll be setting up dealer networks here in Canada."
Chery is a car company from China that makes affordable cars and electric vehicles. They want to sell their cars in Canada.
Chery is a Chinese automotive manufacturer known for producing affordable vehicles including electric models. It is expanding its presence in international markets including Canada.
Mercedes-Benz
"It's hard to get a Mercedes store. It's hard to get a BMW store, a Toyota store. They're not really making any more of them, so to speak."
Mercedes-Benz is a famous car brand from Germany that makes fancy and high-quality cars. Their car stores are special and not easy to get.
Mercedes-Benz is a German luxury automotive brand known for premium cars, SUVs, and commercial vehicles. Its dealerships are often limited and highly sought after by dealer groups.
BMW
"It's hard to get a Mercedes store. It's hard to get a BMW store, a Toyota store. They're not really making any more of them, so to speak."
BMW is a German car company that makes sporty and luxury cars. Their car stores are special and hard to get.
BMW is a German automaker known for sporty and luxury vehicles. Like Mercedes-Benz, BMW dealerships are limited and competitive to acquire for dealer groups.
Toyota
"It's hard to get a Mercedes store. It's hard to get a BMW store, a Toyota store. They're not really making any more of them, so to speak."
Toyota is a car brand from Japan that makes dependable and popular cars. Getting a Toyota car store can be hard for new businesses.
Toyota is a Japanese automaker known for reliable and popular vehicles worldwide. Its dealerships are widespread but can be difficult to enter for new dealer groups.
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