A look at what China’s expansion into North American markets may mean for electric vehicle makers and marketers

Armageddon or acceleration?

Editor's note: Tim Grainey is the founder and managing member of Strategic Research Initiatives. He has over 30 years of experience in qualitative and quantitative research, with work in automotive a specialty. He can be reached at www.strategicresearchinitiatives.com.

China, the world’s leading car producer, finished 2025 with a record 34.5 million units (gas engines and electric vehicle combined). China’s electric vehicle exports to Europe, Latin America, Africa and Asia exceeded 7 million units.¹ The United States, the No. 2 global producer, finished with about 10.5 million units produced² and 16 million vehicles sold in 2024.³

Chinese automotive manufacturers – of which there are more than 100 brands from over 35 manufacturing groups for cars and light trucks – are finally entering the North American market. After acquiring well over 50% of their home market in 2025⁴ and achieving rapid inroads in Europe and Latin America in recent years, Chinese manufacturers have this year been permitted to sell up to 49,000 electric vehicles per year in Canada (2.6% of current sales) at the country’s most-favored-nation tariff rate of 6.1%,⁵ which will increase to 70,000 units in five years’ time.⁶ An automotive expert source in Canada said that these companies would likely initially focus on three major metropolitan markets – Vancouver, Toronto and Montreal – utilizing existing dealers to market their products. There is also an expectation that the upper limit on imports to Canada could be expanded or even eliminated within a few years, if their vehicles prove popular through robust sales.⁷

Mexico is the seventh-largest automotive producer in the world and fourth-largest in exports, despite not having any major local brands. The country has been a major new-vehicle exporter to the U.S. for many years. EV sales have grown in the market since 2021 and Chinese manufacturers have an 11.2% share of the market as of 2026 Q1, matching the traditionally popular German manufacturers for the first time.⁸ This success has led to Chinese manufacturers currently examining local production options, led by GAC and BYD, to support local sales growth, while also building sales throughout Central and South America and preparing for the possibility of entering the United States.

Regarding the U.S., it is no secret that China’s auto firms have been exploring the market for years but have been kept out due to tariffs, national security concerns with their software technology on vehicles and other obstacles. With increasing success in Mexico and imminent entry into Canada, some believe that Americans will have the opportunity to shop for their EVs within a year or two, particularly if these companies establish manufacturing operations in the country.⁹ Two Chinese companies have a unit or a parent company who currently produce in the U.S. – Zhejiang Geely Holding through Volvo and Leapmoter through Volkswagen – while global EV sales leader BYD has been manufacturing electric trucks and busses in Southern California since 2013 and is now the largest battery-electric bus manufacturer in North America.¹⁰ 

In 2025, Kerrigan Advisors found in a survey of U.S. automotive executives that 76% of the respondents felt that Chinese carmakers will eventually begin selling vehicles in America¹¹ but 70 percent expressed concern about the financial implications of Chinese automakers’ rising global market share.¹² This is particularly interesting as the National Automobile Dealers Association is virulently against the idea of Chinese vehicles launching in the U.S. The Alliance for American Manufacturing has called the entry of Chinese EVs into the U.S. potentially an “extinction-level event” for America’s auto industry.¹³ Others feel that their entry would be a positive for the growth of electric vehicles, particularly as 2026 has seen a drastic loss of market share from a high of 7% in 2025, after the repeal of the $7,500 tax credit for many new EVs on September 30, 2025, the loss of incentives for manufacturers to build EVs, concerns about the lack of charging infrastructure in some regions of the country and rising vehicle prices in general. They theorize that increased EV sales could speed up investment in charging stations and force vehicle prices down. Christine McDaniel, based at George Mason University’s Mercatus Center and who was a trade official in the George W. Bush administration, felt that eliminating tariffs and opening up the market is the best approach: “Yes, it would be disruptive. But EVs would get on the road in the U.S. a lot faster.”¹⁴ Volvo CEO Hakan Samuelsson told Automotive News Europe: “I would not rule out that electrification will happen in the U.S. independent of the incentives. It started in the U.S. with Tesla without any incentives.” The author went on to say that Samuelsson “considers the U.S. the ideal market for electric cars” because more people have the ability to charge an EV at home than do owners in Europe, where many have to park nightly on public streets.¹⁵

There is another myth that Chinese manufacturers would focus on the low-priced segments, much as the Japanese and Korean manufacturers did when they entered the U.S. decades ago, with have often been derided as “cheap Chinese knockoffs.” Chinese EVs have done well in international markets due to their strong pricing advantage: “Models that cost the equivalent of $7,000–$10,000 in China can still undercut many rivals abroad, even if marked up for profit. In fact, BYD often sells its cars for much more in Europe than in China, sometimes double the price, but even those export prices are highly competitive.”¹⁶ It’s clearly established that China could enter the U.S. with the least-expensive vehicles in the market; in China, they cost on average $20,000 less than the current EVs in the North American market. The average new car in the U.S. reached $51,456 in March. In China, more than 200 battery-powered models, including hybrids, are priced below the equivalent of $25,000, based on data from the platform DCar. Five of the best-selling electric vehicles in China each start under $12,000, illustrating how competition has pushed costs down across the segment.¹⁷ European markets have seen rapid market share gains by EVs from China.¹⁸ Their flexible pricing, thanks to heavy incentives from Chinese government agencies, have also been utilized in Latin America, where the Chinese makers have gained 86% of the total EV market. For example, the JAC E-Sei4 is priced at $45,000 in Mexico and is only $27,500 in Costa Rica.¹⁹

The worst-case scenario for the U.S. is that Chinese EVs conquest not only the lowest-priced vehicle buyers but capture multiple segments with their price advantage, drastically reducing market share of GM, Ford, Toyota, Nissan, etc., and ultimately necessitating work layoffs across the country. Chinese EVs now boast competitive range and technology.²⁰ In Europe, companies such as BYD, Xpeng, Nio, Great Wall, Geely and SAIC are offering models viewed as less-expensive equivalents of high-end luxury manufacturers such as Audi, BMW and Mercedes.²¹ 

Market research professionals working with manufacturers and their advertising agencies will face a complicated situation, with Chinese EVs potentially arriving shortly into Canada and at some point following into the U.S. We present some recommendations for those working with Chinese companies as they prepare to enter Canada and eventually the U.S., as well as for those guiding current client companies – domestic and imports – in the North American markets.

Leading Chinese EV companies into the U.S.

Market entry research

When companies are deciding whether to expand into a country, they typically conduct market entry research. That research identifies the opportunities in the market, including: competitors in the market; current brand imagery; infrastructure needs to support their products/services; distribution and sales channels; realistic product/services price points; financial projections (including prospective currency exchange rates); cultural (local market) considerations; legal considerations.²² 

These companies from China have recently entered sophisticated automotive markets such as Brazil, Germany, Mexico, Norway and the U.K., so they have a marketing model with plans to address many of these topics, but could use assistance with some specific issues, particularly in understanding the North American auto consumer and setting effective marketing approaches.

Advanced product research

Advanced product research (APR), colloquially referred to as “car clinics” by researchers, allows manufacturers to test new vehicle concepts before launch. In this case, the Chinese manufacturers will be primarily focused on marketing clinics – typically conducted less than 12 months before the vehicle enters the market. These studies are less focused on making changes to the vehicle than marketing the unit after it launches. Within a typical three-to-four-hour consumer product test, respondents will evaluate one-to-two test vehicles versus three-to-five similar segment offerings already in the market. Conjoint analysis of feature pricing and acceptance of different models’ pricing and financing can also be assessed in this environment. Consumers love drive tests but they are comparatively rare; the Chinese makers should implement them to start, to test consumer reactions to operating these vehicles since they have little knowledge of these brands/models, rather than just conducting static interior and exterior evaluations.

Awareness/consideration/purchasing/brand tracking

This element can be crucial for these new vehicles to help the Chinese companies develop sales projections across regions, customer segments, brands and models. There have already been benchmarks done on interest in Chinese vehicles in general and some specific brands but these will need to be expanded as brand/model marketing efforts launch.²³ The purchasing tracking element will allow them to assess dealership sales. Qualitative interviews with dealers could uncover suggestions for improvements to better support the selling process. Early buyer surveys will provide input on what delights the buyer, what could be improved and early reads on brand retention ahead of their next purchase. There should be an initial concentration on brand awareness and acceptance in Texas and California and other border states with Mexico, which see a lot of cross-border traffic for these vehicles. Over time, brand tracking measures can be added to assess brand health and overall consumer perceptions of these new-to-market companies.

Advertising effectiveness

Combined with awareness and brand tracking, advertising effectiveness studies will be crucial to the success of these new brands/models. Market researchers will be essential in guiding the companies and their advertising agencies in developing effective advertising and promotional campaigns for both traditional and social media channels. The idea of using influencers to test or drive a vehicle for a limited time could be effective for creating initial interest in these brands but should be used conditionally and not as the only approach, as one new vehicle company to the U.S. market found to its chagrin a few years ago, when it dedicated a substantial portion of its first-year marketing budget, including the gift of a new model, to a television personality for social media videos and posts; unfortunately this person had virtually no impact on disseminating information on the brand and subsequently lost interest in their new vehicle.

Quality tracking

After the vehicles launch, the Chinese manufacturers will want to leverage existing quality tracking studies, which will help to benchmark customers’ service experiences with the new vehicles.

Dealer attitudinal assessments

The Chinese manufacturers should begin tracking dealers’ attitudes towards working with them and use qualitative approaches to fully understand their reactions on a number of issues, including sales margin expectations, after-sales infrastructure for service and parts, marketing support and other issues which impact success. Dealerships in Mexico and Europe have expressed some issues in working with Chinese manufacturers as they have entered these markets.²⁴ 

Message testing for EV adoption in general

Although EVs are more common in the U.S. and Canada than even a few years ago, thanks in no small part to Tesla and the traditional manufacturers offering alternate fuel vehicles, message testing of concepts for dissemination of clear information to offset key concerns about EV ownership, such as reduction in battery costs, miles on a charge, charger availability and other issues is still needed. Qualitative interviews followed by tracking studies would help manufacturers, dealerships and their advertising agencies adjust their messaging, particularly to drive increases in EV sales over the next few years.

Guiding current domestic and import companies in the U.S. and Canada

As the Chinese manufacturers become competitors in North America, market researchers working with domestic and import companies currently selling in the U.S. and Canada can assist their clients in other important ways beyond traditional sales and customer experience/quality measure research, including the following.

Understanding the strategies of the Chinese companies

This focus would include pricing strategies, model launch timelines, regions of focus (such as the three major markets in Canada) as well as sales and service policies and emphases.

Advertising and marketing campaign research

The Chinese companies have been hugely innovative in their product design, including over-the-air updates and features. Chinese makers also refresh their vehicles every 1-to-1.5 years versus 4-to-5 years for legacy makers – which was unheard of only a few years ago – and could be a key selling advantage to prospective customers, as they are receiving the latest technology in their new vehicle.²⁵ We can expect companies such as BYD, Great Wall Motor, Geely, Chery, SAIC (MG), Nio and Zpeng Motors²⁶ to be equally innovative as they plan to enter the North American markets and their competitors must understand what is working for them in order to adjust their own approaches. 

Sales projections

The current manufacturers producing and selling vehicles in North America already have solid sales projection applications that they utilize. Adding the Chinese models to their databases will help them understand potential effects of these new models at the model, segment, brand and regional levels and for other key metrics. Market research data can help understand these changes and implement improvements in these projections, which drive key strategy development plans.

Effect on EV consideration and purchase

A longer-term research focus would be to measure the effect of the Chinese EV entries on overall EV consideration and purchase. Measuring the follow-on effect for the development of the existing charging infrastructure in the two countries, as well as customer use of these new vehicles for daily driving and for longer-distance trips, will be beneficial as well for the industry as a whole.

Cognizant of the changes 

Perhaps the arrival of Chinese EV manufacturers will not be Armageddon for the domestic U.S. car brands and imports who are currently building and selling in North America, but it will be a major market upheaval. Existing manufacturers will need to be cognizant of the changes in their markets and conduct extensive research projects in order to maintain their current market positions, profitability and even exploit some opportunities in what could be a very different looking North American automotive milieu within the next three to five years.

References

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2 Motor vehicle production – United States – 2024. (2024). Statbase.org.

3 Scott, LaToya. (2025). “U.S. auto industry rebounds to 16M sales in 2024, as GM, Ford and Toyota drive the push.” Finance.yahoo.com, January 19.

4 Bernard, Adam. (2025). “The rise of Chinese automakers.” CarandDriver.com, October 25.

5 Truett, Richard. “How Chinese sales in Canada can pave way for a U.S. entry.” (2026). Automotive News. March 23, pp. 1, 23.

6 Canada’s total new vehicle sales in 2025 were 1.9 million.

7 Private telephone interview with a long-time Canadian automotive consultant. (2006). March 5. 

8 De Alba, Teresa.(2026). “Chinese automakers top 101,000 sales in Mexico, MG leads.” Mexicobusiness.news, April 30.

9 Truett, Richard – ibid.

10 Martinez, Shandra. (2022). “A tour through the BYD electric bus plant.” Bus and Motorcoach News, June 27.

11 Howe, Gail Kachadourian (2025). “Automaker executives expect Chinese carmakers to enter U.S. market, Kerrigan Advisors survey finds.” Automotive News China, May 12.

12 Greenfield, Steve. (2025). “Chinese automakers poised to disrupt U.S. market, says Kerrigan survey.” CBTNews.com, May 23. 

13 McMullen, Matthew. (2026). “The threat posed to the U.S. auto industry by Chinese imports remains.” Alliance for American Manufacturing, January 15.

14 “Low-priced Chinese EVs reaching US from Mexico pose a threat to automakers.” (2024). Business-standard.com, June 27.

15 Hogan, Mack (2026). “Volvo’s CEO thinks the U.S. market is ‘perfect’ for EVs. He has a point.” InsideEVs.com, January 30.

16 “China’s EV surge shakes the world.” (2025). Internationalfinance.com, September 15.

17 Malek, Ahlam. (2026). “For the price of one U.S. car, China offers five EVs: a gap that’s turning heads worldwide.” Thenewswheel.com, April 30. 

18 Popov, Ivan. (2025). “Europe Q1: Chinese auto sales rise 78%, but EV growth slows to 29%.” EVMagz.com, May 4.

19 Celemin, Juan Diego. (2024). “EVs grow 94% YoY in Mexico, Tesla model Y leads the market.” CleanTechnica.com, March 19.

20 Yang, Zehi. (2024). “Chinese EVs have entered center stage in U.S.-China tensions.” MIT Technology Review, March 6.

21 Huber, Victor (2025). “7 Chinese car brands destroying European automotive industry.” Netvaluator.com, August 29.

22 Grainey, Timothy. (2017). “Not so fast: Is Cuba a new business opportunity or a mirage?” Quirk’s Marketing Research Review, January-February. 

23 “Chinese auto brands: What U.S. consumers and dealers think.” (2026). Coxautoinc.com, February 25.

24 Iliff, Laurence. (2026). “Mexico dealers: China brands are a mixed bag.” Automotive News, March 30, pp. 1, 22.

25 Lopez, Jonathan. (2026). “Legacy companies like GM can’t match Chinese automakers’ speed, says report.” GMAuthority.com, July 3.

26 Kennedy, David. (2026). “Chinese automakers plan Canada entry.” Automotive News, March 16, p. 9.