Stellantis is reportedly considering building Chinese EVs in Canada, underscoring the ripple effects of Canada’s ongoing trade tensions with the U.S.
The details: Under a potential agreement, Stellantis would build the EVs with its Chinese partner, Zhejiang Leapmotor Technology Co., at its idled assembly plant in Brampton, Ontario, a suburb of Toronto, The Detroit News reported.
The move is tied to Stellantis’ 20% stake in Leapmotor and its joint venture with the Chinese company focused on the global production and sale of EVs.
Discussions are still in the early stages, with Canadian Industry Minister Melanie Joly confirming the government and Stellantis are in talks.
The Brampton plant employs roughly 3,000 unionized workers, meaning any deal would likely require extensive negotiations among the stakeholders.
What they’re saying: “Any new auto investments will prioritize Canada’s supply chain, including Canadian labor and parts suppliers,” the minister’s office said, without mentioning Leapmotor or any Chinese companies, per The Detroit News.
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Why it matters: For dealers, the bigger issue is what this could signal for North American supply, pricing, and competitive pressure. If Stellantis moves ahead, it could create a new lower-cost EV pipeline into Canada and potentially reshape how automakers position inventory, incentives, and EV strategy across the region.
Between the lines: This would mark the first major Chinese auto investment in Canada since Prime Minister Mark Carney struck a January deal with President Xi Jinping to ease tariffs on Chinese EVs, part of a broader push to reduce Canada’s reliance on the U.S. amid trade tensions with the Trump administration.
The reduction cuts the tariff rate on Chinese EV imports to Canada from 100% to 6.1% and applies to EVs priced at $33,000 or less, with a first-year cap of 49,000 vehicles that expands to 70,000 by year five.
As part of the agreement, Canada said it wanted to attract new Chinese joint-venture investment “with trusted partners” in the Canadian auto sector within three years, per The Detroit News report.
Converting the idle Brampton plant into a Chinese EV manufacturing facility could further strain trade relations with the U.S. as negotiations over the U.S.-Mexico-Canada Agreement continue.
Bottom line: Even if nothing is imminent, dealers should watch this closely. A Stellantis-Leapmotor manufacturing play in Canada could add fresh pricing pressure in entry-level EVs, complicate cross-border trade dynamics, and influence future allocation, sourcing, and policy decisions that affect retail competitiveness in the U.S.
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