DETROIT (AP) — Chinese automakers have been making strides around the world with growing sales of their high-tech, stylish and affordable electric vehicles. This has worried competitors even before Canada agreed this week to reduce its tariffs on Chinese electric vehicles in exchange for concessions on Canadian agricultural products.
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Experts now say an easier path to Canada could be a big boost for Chinese automakers seeking to dominate the global market, particularly as their domestic market weakens. That poses a threat to other automakers, particularly American companies.
U.S. officials acknowledged as much in remarks at an assembly plant for Jeep maker Stellantis in Toledo, Ohio, on Friday. Transportation Secretary Sean Duffy said the Chinese Communist Party is investing 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. Regarding the trade deal with Canada, he added: “They will live to rue the day they partner with China and bring in their vehicles.”
Others say change is inevitable.
“This tells us that Chinese automakers are still very popular and doing better and better, and not just something that is sold in global markets that are more marginal or less important to American automakers,” said Ilaria Mazzocco, deputy director and senior member of the Board of Trustees for Chinese Economics and Business at the Center for Strategic and International Studies.
What distinguishes Chinese vehicles?
Vehicles made in China are high quality, stylish and affordable, experts say.
“It is clear that vehicles manufactured by Chinese brands are very competitive in cost, but they are also technologically very desirable,” Mazzocco said. “They tend to be connected vehicles, so they have a lot of additional software capabilities that consumers seem to like. But price and competitiveness are really big selling points.”
These vehicles can cost as little as $10,000 to $20,000; In the United States, new vehicles cost about $50,000 on average, and electric vehicles even more.
Chinese companies also have unique advantages in automobile manufacturing and production, efficiency, and making lighter vehicles, which helps extend the driving range of an electrified vehicle.
“They’ve found a way to make small and midsize cars — cars that people want — at a reasonable price,” said Sam Fiorani, vice president of AutoForecast Solutions. “These are the segments that GM, Ford and almost everyone else have abandoned.”
Many automakers have discontinued smaller vehicles in favor of large sport utility vehicles and higher-margin pickup trucks that are much more profitable.
So why do Chinese electric vehicles pose such a big threat to American and other automakers?
Much of the global automobile market is electrifying, an ideal opportunity for advanced Chinese automakers to seize. China saw 17% growth in hybrid and plug-in 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 moves forward, American automakers have watered down their once-ambitious multibillion-dollar electrification plans, opting instead for more efficient gasoline-electric hybrid vehicles amid the Trump administration’s shift away from a pro-EV policy.
That shift threatens the competitive advantage of American automakers for years to come. As it is, Tesla lost its crown as the world’s best-selling electric vehicle maker last year, delivering just 1.64 million vehicles in 2025 compared to 2.26 million for its Chinese rival BYD.
The Trump administration’s policy of cutting emissions standards at a time when Chinese companies are moving ahead quickly has experts worried about the future of American automakers.
Chinese automakers will have to meet the standards required by the Canadian auto market for the latest trade deal to be successful (standards similar to those in the United States), which will likely incentivize investment in Chinese auto manufacturing in Canada.
They will also have to establish which market segment they are targeting: high-end vehicles or less expensive vehicles that sell in higher volumes.
Still, “it recognizes what it takes to compete globally,” said Mark Wakefield, global automotive market leader at AlixPartners. The firm predicts that Chinese brands will account for 30% of the global market by 2030.
“They already started in Europe. They started in South America. Now in Mexico and Canada,” Wakefield said. American automakers “don’t want to end up like a Brazil with their ethanol cars that can’t be sold anywhere else in the world and… like Britain or Australia, which used to matter in the automotive world, and don’t really matter anymore.”
Why have others tried to regulate the expansion of Chinese electric vehicle manufacturers?
Countries have attempted to regulate the entry of Chinese electric vehicles into their markets for several reasons.
“China has become an overwhelming machine that makes cheap vehicles. And the fear is that if you give them an inch, they will take you a mile,” Fiorani said. “The other issue is technology. These vehicles are data centers… and the idea that a state-owned company in China can have access to where a large portion of drivers are going gives them an advantage for all types of outlets.”
The European Union raised tariffs on Chinese electric vehicles last year, although the two have been resolving it earlier this year.
In 2024, former President Joe Biden set a 100% tariff on Chinese electric cars. Canada matched that import tax on vehicles until this week. And even with an annual limit on imports, the fact that Canada reduced its tariffs this week means those companies are one step closer to American soil. The Mexican automotive market has welcomed Chinese electric vehicles, with massive growth last year.
“The advance of Chinese manufacturers is inevitable. It will happen eventually. Everyone is negotiating to put up obstacles to determine: What data is being processed and how much market share will Chinese manufacturers be allowed?” Fiorani added.
“A lot of barriers have to be raised, but eventually they will reach all Western markets.”
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Alexa St. John is a climate reporter for the Associated Press. Follow her on X: @alexa_stjohn. Contact her at ast.john@ap.org.
