Aside from the world’s longest undefended border, the United States and Canada share many things. Great lakes, oil pipelines, trade routes, mountain ranges, and languages, to name a few. The two countries also have lots of differences. When’s the last time you saw large swaths of America speaking French, or an FBI agent riding a horse?
In the world of cars, there is one major difference between the U.S. and Canada right now: Whether to impose import tariffs on Chinese cars. Back in January, seemingly in response to American manufacturers moving production out of Canada, the northern country and China laid out a framework under which Chinese manufacturers could import their vehicles into Canada at a tariff rate of just 6.1 percent—a significant drop from the 100% import tariff that had previously matched the 100% tariff imposed by the U.S. in 2024.
For Chinese automakers, this is a big win for a few reasons. Not only is Canada another market prime for growth in the EV and PHEV segments, but it also means the cars developed for the Canadian market can also be used for the American market, since the U.S. and Canada share safety and emissions standards.
What else is going on? In the world of ultra-luxury vehicles, a lot, actually. Bentley says it’s cancelling four of the five EVs it had planned, not only because the demand for EVs is far lower than expected, but because its VW Group stablemate, Porsche, canceled the platform they were to be based on. Meanwhile, Ferrari is pausing deliveries in the Middle East over the war in Iran. Also, Lexus finally has a price for its all-electric ES sedan.
Let’s get into it.
Why Canada Is The Perfect Stepping Stone For China To Get Cars Into The U.S.
Among the things the U.S. and Canada share, the most relevant for this conversation is vehicle safety and emissions standards. For decades, Canada has adopted America’s crash test safety and emissions regulations, meaning that if a vehicle is authorized for sale in one country, it can very easily be sold in another.
When buying a used car in Canada, all you have to do to get it federalized for registration in the U.S. is switch out the speedometer from kilometers per hour to miles per hour and get a letter from the manufacturer saying it meets U.S. standards. Aside from a few small differences, the cars are usually identical.
For BYD, Chery, and Geely Holding Co., the three Chinese automakers planning to enter the Canadian market, these shared rules represent a great value proposition. Instead of having to develop two separate vehicles to meet two different standards for crash testing and emissions, they can develop one car. From Automotive News:
This means BYD, Chery and Geely will each have just one engineering bill come due to homologate their vehicles in both markets.
“If you homologate to Canada and want to [sell] across the border, you are good to go,” said Terry Woychowski, president of automotive ar Caresoft Global Technologies, the Detroit firm known for its engineering analysis and cost studies derived from vehicle teardowns.
[…]
And if the three automakers focus solely on electric vehicles, the cost and time to enter both markets will be further reduced.
Regulators in Canada and the U.S. certify EVs for efficiency and range in harmonized laboratory test procedures. The U.S. accepts most Canadian certified vehicles, according to the EPA.
Canada will also serve as a great test bed to gauge interest in Chinese vehicles for the greater North American audience, since U.S. buyers and Canadian buyers share similar tastes in cars.
It’s not all roses for Chinese automakers, obviously. Differences in stuff like software or exterior lighting may need adjusting before the cars meet U.S. standards.
Their Canadian market vehicles would need certification for the U.S., said Sam Fiorani, vice president of global forecasting at AutoForecast Solutions.
“Among the few differences would be the connected-vehicle limitations, but many other certifications are very similar between the two countries, requiring relatively minor modifications,” Fiorani said in an email.
There’s also another hurdle: America’s Chinese software ban. The U.S. has outlawed the sale of connected cars with China-sourced software starting for the 2027 model year, which means any current car from a Chinese brand wouldn’t be able to enter the U.S. market.
While that’s a limiting factor right now, there are ways around it. For one, Chinese automakers can simply start developing and building cars in Canada or America. Because of the current USMCA trade agreement, importing cars from Canada right now is a little complicated, tariff-wise. From Autonews:
Under current rules, the non-U.S. content on USMCA-compliant vehicles built in Canada is tariffed at 25 percent. Vehicles that are not USMCA compliant are tariffed at 25 percent of the value of the entire vehicle.
If Chinese brands were to start building cars in the U.S., things would get a lot simpler. While that might sound like a long shot, it’s less far-fetched than you think. Several Chinese brands made big splashes at CES in Las Vegas back in January, while Geely even let journalists, including me, drive a bunch of their cars on a race track. Most importantly, President Trump, talking about Chinese brands entering the U.S., had this to say that same month, per Autonews:
“If they want to come in and build a plant and hire you and hire your friends and your neighbors, that’s great, I love that,” President Donald Trump said during remarks at a Jan. 13 meeting of the Detroit Economic Club. “Let China come in, let Japan come in.”
At this point, it feels like a matter of when, not if, Chinese vehicles will hit the U.S. market en masse.
The Dark Side Of Platform Sharing
Platform sharing is a widely used strategy in the automotive industry, in which a carmaker—usually an automotive conglomerate with many different brands—develops a singular, modular architecture that can underpin a large variety of cars throughout its lineup. This has many obvious advantages, since instead of having to develop, say, five different SUVs from scratch, a company like the VW Group can use the same underpinnings for the Volkswagen Touareg, the Porsche Cayenne, the Bentley Bentayga, the Audi Q8, and the Lamborghini Urus. That’s a lot of money saved.
Platform sharing has its downsides, of course. Because the cars share an architecture, it restricts engineers on what they can do with the powertrain and chassis setup. It also restricts designers on how they can differentiate cars between brands. And, as Bentley learned, it means that if your future cars are based on a platform from the greater conglomerate, and that platform gets canceled, your cars get canceled, too.
CEO Frank Walliser confirmed that while the Bentley EV planned for 2027 is still on track, the four other EVs it had planned had to be called off, since Porsche canceled its EV platform, which it planned to use on its upcoming SUV and all-electric Panamera sedan. From Auto Express:
In conversation with Auto Express, Bentley CEO Frank Walliser said: “We have to rethink and recalculate our complete product line, and all future offers. If you compare our planning with what it was two years ago, it looks completely different.”
The news comes as little surprise given the decision by Porsche to cancel the SSP-61 platform program – formerly known as the SSP-Sport – that was destined to underpin the future K1 SUV, plus the next-generation Taycan and a new all-electric Panamera.
By extension, this means that development of Bentley’s four future EV models due by 2035 has also been put to bed.
For what it’s worth, that doesn’t mean Bentley’s EV goals are canceled. Like many automakers, the company is simply putting its EV transition on hold and instead turning its sights on hybrids. For now, that seems like a smart approach.
No Ferraris For The Middle East, For Now
Staying on the subject of exotics, the conflict in Iran means Ferrari buyers in the company’s small (but important) Middle Eastern market aren’t getting their cars. The company confirmed to Bloomberg it’s suspended “most” shipments of new cars to the region.
“We are closely monitoring the developments in the Middle East and the potential implications for our business,” the Italian super-car maker said Thursday in a statement to Bloomberg News. Ferrari has been “managing a few deliveries via airplane,” it said.
Ferrari shares extended losses and fell as much as 4.6% in Milan. The stock is down around 11% this year.
The move highlights how geopolitical risks are starting to affect logistics for luxury-auto makers, even as Ferrari’s low volumes and multi-year order backlog help cushion potential disruptions.
As Bloomberg points out, the Middle East only accounted for around 4.6% of Ferrari’s sales. But as the conflict in Iran drags on, it could have lasting effects for the brand. The nice thing about being a company as small and agile as Ferrari is that it can reallocate cars to different markets and adjust production far quicker than your average car brand. While those moves can only get you so far, I wouldn’t worry just yet.
The Lexus ES Is A Sub-$50,000 Electric Sedan With Okay Range
About a year ago, Lexus showed off a drastically new ES sedan, complete with either hybrid or electric power. Now, the car is finally on sale, and it’ll be available as an EV first.
There are two trims available: A base, front-wheel drive ES 350e and an all-wheel drive ES 500e, both using the same 74.7-kWh lithium-ion battery pack. The 350 is the cheaper of the two, priced from $48,795 including destination charges, and also the trim with the most range, rated at 307 miles, as estimated by the EPA. Adding the rear motor nets you 338 horsepower (versus just 221 in the base car), but you lose 31 miles of range.
In the late 2010s, those numbers might’ve been competitive, but in the year 2026, not so much. Don’t forget, just yesterday, BMW revealed its i3 sedan, which is supposed to compete in the same segment as this Lexus. That car has 800-volt charging tech and up to 440 miles of range, according to preliminary estimates. Sure, it’ll probably be a bit more expensive than the ES, but in this case, I’d say the extra coin is probably worth it (going by specs alone, anyway. I haven’t driven either of these cars, so final judgement is on hold until then.)
I’m far more interested in the hybrid version of the ES. Because it uses Toyota’s TNGA-K platform, that means it’ll be mostly Camry underneath, and the Camry is a great car. Deliveries of that car will start later this year.
What I’m Listening To While Writing TMD
Thinking about the dark side of car-sharing platforms reminded me of the wonderful song “Darkside” by Blink-182, from their 2019 studio album, NINE.
The Big Question
When do you think Chinese cars will enter the U.S. market? Would you buy one if the price and specs were right?
Top photo:
With the low rumblings of how many jobs will be lost to AI, maybe it’s not such a bad thing to force all these manufacturers to build in the US.
Although I would rather AI crash and burn.
I get making a comparison between the ES and the i3 since the latter launched yesterday, but these models do not and have never competed.
The ES has always been a warmed over FWD Toyota. The real 3 series competitor is the IS, which is now 13 years old.
WTF, that ES is f’n disgusting. I don’t even know how an abomination such as that gets called “designed”. I don’t even think line-blind non-designers would come up with something so bad.
I have to admit, my honest first reaction to the picture of the Lynk & Co. 09 was “how did Porsche manage to make the Cayenne even less attractive?”
Has the Rivian R2 been mentioned here since the official announcement? It’s been like a week. What gives?
Big oversight for sure.
Anyone know how the door opening size of this new lexus es compares to the crown signia and Camry? It’s almost impossible for me to fold myself into either of those. Hoping the es is focused on easy ingress/egress for older Americans like the avalons were.
I have a Buick Envision, so yeah.
Speaking as a Canadian, I would really prefer that we switch to EU standards. The more separated we can get from the US the better, and EU standards are just plain better for all involved anyway.
I’d welcome the death of amber side markers, but the EU can keep the speed warnings and other intrusive “safety” features that default to on each time the car is started.
You could just switch to no safety standards. Then every car made everywhere would be available. Yugos and Jasonian built cars for everyone.
I want to love you (B.Y.D.)
TIL that Blink-182 made an album in 2019.
I used to be triggered by Chery being spelled with one r, but then someone pointed out it was a misspelling of Chevy. Now I just giggle.
I think China will enter the US market when the political climate is amenable to it. It might be awhile. Would I buy a Chinese auto? Possibly. I was in Mexico recently and there are a lot of Chinese vehicles there. While we seem to think that China only makes EVs, most of the ones I saw were ICE. There were some pretty good looking pickups and SUVs, so I could see them being competitive here. They might want to rebrand with names Americans can pronounce, but maybe not. People buy Hyndais, so why not Byd?
Americans said the same after WW2, of both Japanese and Germans cars, as far as buying.
In my experience with Chinese branded rental cars in Mexico – they are crap. Part of the reason the focused on the future with EVs instead of making competitive ICE vehicles.
You might be right, but then everything we rode around in (Uber) was clapped out, from Hyundais to Nissans, to Toyotas. I think part of it is the harsh environment, cobbled streets, speed bumps etc.
Yes, the roads take a toll. The last rental I had was a Nissan Versa with less than 20K km that the suspension clanked over bumps like it had 10x that mileage.
However, I was more talking about engines. We had a midsize Chery Tiggo 7 seat crossover with a tiny 1.5L turbo. It had 80’s levels of turbo lag and when attempting to accelerate it would bog and then spin the front wheels before moving on at a leisurely pace.
Well, you’re right, that would never fly here.
I cannot say I’d never buy a Chinese car. There are a few sedans that are quite attractive, but I’m sure they would cost much more here in the US than they do in their home country, thus killing the value proposition.
Also, who at Porsche thought it was a good idea to have an electric Panamera and the Taycan? Looks like perhaps they came to their senses.
Somewhat.
But at least that means that ugly-ass Bentley will never be seen on the road.
Americans said the same after WW2, of both Japanese and Germans cars, as far as buying. Now look at the market share of Japanese cars.
I think the Chinese oems will eventually get over here, but I don’t think it will happen as quickly as others do. I also don’t believe they are as much as a threat since the US market doesn’t really support EVs, and their big come up has been almost entirely government subsidized. I do however think their best shot is to partner with established OEMs here as a Joint Venture. I don’t think that’s a great business idea since they’re notorious for stealing IP, but “stock price must go up so let’s chase an almost nonexistent EV Market.”
I wouldn’t ever buy one, but nothing they make currently speaks to me. Neither does an EV. However as someone that works for a large OEM on the manufacturing side, I acknowledge that I am heavily biased. Yet for the record, I currently do not own or drive any of our products, instead have a garage of the cross-town rival’s stuff. That’s going to change later this year cause the lease deal for our primary family hauler is too good to pass up on. Trading in that car will also give me a decent pile of cash to go buy one of my realistic dream daily drivers too.
Have not seen an FBI guy on a horse lately.
But there’s a purported video out there of the former DHS chief riding a horse named Cory…
why is the lexus so ugly?
WHY is the Lexus more aggressively styled than a Camry!
Because Lexus doesn’t make a single good looking car?
They’re still making the LC until August but after that, you’re right.
That Lexus looks just awful – is the traditional Avalon/ES buyer going to go for that? Would it really kill Toyota to make something that actually looks good?
Speaking of Lexus, I was driving home a couple of days ago and didn’t see a single dark green car nor a single car that I thought would really look good in dark green. Remember how good those 2nd and 3rd generation ES’s looked in “Lexus Green,” even (especially?) with gold trim?
A lot of Lexus’ are driven in areas rife with cattle, moose or deer, which if an impact thereof does occur the grille is designed to project out of the way without harm to the vehicle or its occupants.