DETROIT (AP) — Chinese automakers are making inroads around the world with growing sales of their high-tech, stylish and affordable electric vehicles. Even before Canada agreed this week to lower tariffs on Chinese electric vehicles in exchange for concessions on Canadian agricultural products, that was causing concern among rivals.
Experts now say easier access to Canada could be a huge boost for Chinese automakers hoping to dominate global markets, especially as the domestic market weakens. This poses a threat to other automakers, especially American companies.
U.S. officials acknowledged this Friday during speeches at Jeep maker Stellantis assembly plant in Toledo, Ohio. Transport Secretary Sean Duffy said the Chinese Communist Party was investing in the car industry to “control the industry”.
“Why? They want to take over the auto industry. They want to take away these jobs,” Duffy said. As for the Canadian trade deal, he added: “The day they work with China and bring in their vehicles, they will regret it for the rest of their lives.”
Others say the shift is inevitable.
“What this tells us is that Chinese automakers are still popular and doing better and better, rather than just selling something more marginal or less important to U.S. automakers in the global market,” said Ilaria Mazzocco, associate director and senior fellow at the Trusteeship for China Business and Economics at the Center for Strategic and International Studies.
Why do Chinese cars stand out?
Experts say cars made in China are high-quality, stylish and affordable.
“It’s clear that Chinese brands make cars that are very cost-competitive but also technically ideal,” Mazzocco said. “They tend to be connected vehicles, so they have a lot of additional software features that consumers seem to like. But the price point and competitiveness are really big selling points.”
These vehicles can cost as little as $10,000 to $20,000; the average price of a new car in the United States is nearly $50,000, especially for electric vehicles.
Chinese companies also have unique advantages in vehicle manufacturing and production, efficiency and vehicle lightweighting, which can help extend the driving range of electric vehicles.
“They found a way to make small and medium-sized cars — cars that people want — at a reasonable price,” said Sam Fiorani, vice president of AutoForecast Solutions. “These are segments that GM and Ford and pretty much everyone else have given up on.”
Many automakers have stopped making smaller vehicles in favor of larger sport utility vehicles and pickup trucks, which are much more profitable.
So why do Chinese electric vehicles pose such a threat to U.S. automakers and other companies?
Much of the global automotive market is booming, presenting an ideal opportunity for advanced Chinese automakers. Benchmark Mineral Intelligence data released this week showed that plug-in hybrid and electric vehicles will grow by 17% in China and 33% in Europe in 2025.
Meanwhile, U.S. electric vehicle sales grew just 1% last year. As the rest of the world advances, U.S. automakers have scaled back their once-ambitious, multibillion-dollar electrification plans in favor of more efficient hybrid electric and gasoline vehicles amid the Trump administration’s abandonment of EV-friendly policies.
This shift threatens U.S. automakers’ competitive advantage for years to come. In fact, Tesla lost its crown as the world’s best-selling electric car maker last year, delivering just 1.64 million vehicles in 2025, compared with 2.26 million delivered by Chinese rival BYD.
The Trump administration’s policy of slashing emissions rules has experts worried about the future of U.S. automakers at a time when Chinese companies are growing rapidly.
Chinese automakers must meet the latest trade arrangements required by Canada’s auto market to succeed, with standards similar to those in the United States, which could spur Chinese auto manufacturing investment in Canada.
They must also determine whether their target market segment is: high-end vehicles, or cheaper vehicles with higher sales volumes.
Regardless, “it gives us a sense of what it takes to compete globally,” said Mark Wakefield, head of global automotive markets at AlixPartners. The company predicts that Chinese brands will account for 30% of the global market by 2030.
“They’ve started in Europe. They’ve started in South America. Now it’s Mexico and Canada,” Wakefield said. U.S. automakers “don’t want to end up with Brazilian ethanol cars that don’t sell anywhere else in the world… just like the UK or Australia used to be important in the automotive world but aren’t important anymore.”
Why are others trying to regulate the expansion of Chinese electric carmakers?
Countries are trying to regulate the entry of Chinese electric vehicles into their markets for a number of reasons.
“China has become an overwhelming machine for producing cheap cars. The concern is that if you give them an inch, they will go a mile,” Fiorani said. “The other issue is technology. These vehicles are data centers…The idea that China’s state-owned enterprises have access to most of where their drivers are going gives them the ability to exert influence across a variety of channels.”
The EU increased tariffs on Chinese electric vehicles last year, although the two countries resolved the issue earlier this year.
In 2024, former President Joe Biden imposed 100% tariffs on Chinese electric vehicles. Canada imposed the same import tax on vehicles before this week. Even with annual import caps in place, Canada’s tariff cuts this week mean these companies are one step closer to the United States. The Mexican auto market welcomed Chinese electric vehicles and experienced significant growth last year.
“The advancement of Chinese manufacturers is inevitable. It will happen eventually. Everyone is negotiating to put up barriers to figure out: What data is being processed, how much market share are you going to allow Chinese manufacturers to have?” Fiorani added.
“A lot of guardrails have to be put up, but eventually they’re going to be in all Western markets.”
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Alexa St. John is a climate reporter for The Associated Press. Follow her on X: @alexa_stjohn. Please contact her at ast.john@ap.org.
