Chinese EVs are making inroads in North America. That worries industry
experts
[January 17, 2026] By
ALEXA ST. JOHN
DETROIT (AP) — Chinese automakers have been making inroads around the
world with growing sales of their high-tech, stylish and affordable
electric vehicles. That has had competitors concerned even before Canada
this week agreed to cut its tariffs on Chinese EVs in exchange for
concessions on Canadian farm products.
Experts now say an easier path into Canada could be a big boost for
Chinese carmakers looking to dominate the global market — particularly
as their domestic market weakens. That poses a threat to other auto
manufacturers, particularly American companies.
U.S. officials acknowledged that in remarks at an assembly plant for
Jeep-maker Stellantis in Toledo, Ohio on Friday. Transportation
Secretary Sean Duffy said the Chinese Communist Party invests in its
auto industry to “control this industry.”
“Why? They want to take over the auto industry. They want to take away
these jobs,” Duffy said. As far as the Canadian trade deal, he added:
“They will live to regret the day they partner with China and bring in
their vehicles.”
Others say the shift is inevitable.
“This is telling us that Chinese automakers continue to be really
popular, and are doing better and better, and not just something that’s
sold in global markets that are more marginal or less important to U.S.
automakers,” said Ilaria Mazzocco, deputy director and senior fellow
with the Trustee Chair in Chinese Business and Economics at the Center
for Strategic and International Studies.
What makes Chinese vehicles stand out?
Chinese-made vehicles are high-quality, stylish and inexpensive, experts
say.
“It’s clear that the vehicles made by Chinese brands come at a very
competitive cost, but are also technologically quite desirable,”
Mazzocco said. “They tend to be connected vehicles, so they have a lot
of additional software capabilities that consumers seem to like. But the
price point and the competitiveness are really big selling points.”
These vehicles can cost as little as $10,000 to $20,000; in the U.S.,
new vehicles are running close to $50,000 on average, and EVs even more
so.
Chinese companies also have unique advantages as far as auto
manufacturing and production, efficiency and making vehicles lighter,
which helps extend an electrified vehicle's driving range.
“They’ve found a way to make small and mid-sized cars — cars that people
want — at a reasonable price," said Sam Fiorani, vice president at
AutoForecast Solutions. "These are the segments where GM and Ford and
almost everybody else have abandoned.”
Many automakers have discontinued smaller vehicles in favor of
higher-margin, large sport utility vehicles and pickup trucks that are
far more profitable.
So why are Chinese EVs such a threat to U.S. automakers and others?
Much of the global auto market is electrifying, an ideal opportunity for
advanced Chinese automakers to capitalize on. China saw 17% growth in
plug-in hybrid and electric vehicles in 2025, according to data released
by Benchmark Mineral Intelligence this week, and Europe saw a 33%
increase.
Meanwhile, U.S. sales of electrified cars grew just 1% last year. As the
rest of the world advances, U.S. automakers have weakened their
once-ambitious, multibillion dollar electrification plans, instead
opting for more efficient hybrid electric and gasoline vehicles amid the
Trump administration's shift away from EV-friendly policy.
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A BYD electric car is on display at the Essen Motor Show in Essen,
Germany, Thursday Dec. 4, 2025. (AP Photo/Martin Meissner, File)
 That shift threatens U.S.
automakers’ competitive edge in the coming years. As is, Tesla lost
its crown as the world’s bestselling electric vehicle maker last
year, delivering only 1.64 million vehicles in 2025 to Chinese rival
BYD’s 2.26 million.
Trump administration policy slashing emissions rules at a time when
Chinese companies are advancing quickly has experts worried for the
future of American car manufacturers.
Chinese automakers will have to meet standards required for the
Canadian auto market for the latest trade arrangement to be
successful — standards that are similar to those in the U.S. — which
is likely to incentivize Chinese auto manufacturing investment in
Canada.
They'll also have to establish which segment of the market they are
targeting there: Higher-end vehicles, or less-expensive ones that
sell at higher volumes.
Regardless, “It brings it home to what is needed to compete
globally,” said Mark Wakefield, global automotive market lead at
AlixPartners. The firm predicts Chinese brands will account for 30%
of the global market by 2030.
“They’ve already started in Europe. They started in South America.
Now Mexico and Canada," Wakefield said. American carmakers "don’t
want to end up as a Brazil with your ethanol-based cars that aren’t
sellable anywhere else in the world and ... like Britain or
Australia that used to matter in the auto world, and no longer
really matter.”
Why have others sought to regulate Chinese EV-makers’ expansion?
Countries have attempted to regulate Chinese EVs from entering their
markets for several reasons.
“China has become this overwhelming machine making inexpensive
vehicles. And the fear is that if you give them an inch, they’re
going to take a mile,” Fiorani said. “The other issue is technology.
These vehicles are data centers... and the idea that a state-owned
company in China could have access to where a high portion of
drivers are going gives them leverage for all kinds of outlets.”
The European Union hiked tariffs on Chinese EVs last year, though
the two have been resolving that at the start of this year.
In 2024, former President Joe Biden set a 100% tariff on Chinese
electric cars. Canada matched that import tax on the vehicles until
this week. And even with an annual import cap, Canada cutting its
tariffs this week means those companies are another step closer to
U.S. soil. The Mexican auto market has welcomed Chinese EVs, with
massive growth last year.
“The advance of Chinese manufacturers is inevitable. It will happen
eventually. Everybody is negotiating to put up the roadblocks to
figure out: What data is being processed, how much market share
you’re going to allow Chinese manufacturers to have?" Fiorani added.
"There are a lot of guardrails that have to be put up, but
eventually they’re going to make their way into all Western
markets.”
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