Stellantis is discussing options for building electric vehicles in Canada in partnership with China’s Zhejiang Leapmotor Technology, according to people familiar with the matter. It’s a signal of how quickly the auto industry is being reshaped by US protectionism. Tariffs were the trigger that caused Canada to open the door to companies from China, the world’s largest car market.

The talks with the Canadian government are at an early stage. If the companies proceed, it would be the first major Chinese auto investment in Canada since Prime Minister Mark Carney reached an agreement with President Xi Jinping in January to reduce tariffs on Chinese-made EVs.
For Carney and Industry Minister Melanie Joly, it’s tricky. They want to see the factory humming again. But just as important, they want a supply chain and business for auto suppliers in Ontario — not large-scale parts imports from China.

Flavio Volpe, the auto parts manufacturers’ representative, had a warning for the government soon after we published our story. “A ‘complete knock-down’ operation with all parts and systems brought in from China is an import quota cheat. Allowing this will kill Canadian industry,” he said on social media.