Exclusive-China’s Geely to ship first Lotus EVs to Canada in July under Carney-Xi deal, ambassador says

By Promit Mukherjee and Maria Cheng

OTTAWA, June 26 (Reuters) – Geely Holding Group’s Lotus brand electric vehicles will arrive in Canada next month under an agreement between Prime Minister Mark Carney and Chinese President Xi Jinping, China’s ambassador to Canada Wang Di told Reuters ‌on Friday.

They will be the first Chinese-owned and manufactured vehicles for sale under an agreement that allows up to 49,000 Chinese EVs to ‌enter Canada annually at a reduced tariff rate, as Carney tries to diversify Canada’s trade away from the United States.

“Geely EVs will be arriving in Canada next month and they will be ​holding a ceremony when the cars are delivered in Montreal,” Wang said.

Lotus Cars did not immediately respond to a request for comment. Canada’s Global Affairs department could not immediately comment on the first cars’ expected arrival.

Wang said other Chinese brands, such as Chery and BYD are coordinating with Canadian government agencies to complete steps before they can ship to Canada. Some cars arrived earlier for the companies to test in Canadian conditions, Canadian officials have said previously.

“I hope in autumn this year, the ‌truly, genuinely other Chinese brand EVs will complete the ⁠procedures and get into the Canadian market,” Wang said through an interpreter.

BYD Executive Vice President Stella Li recently told Reuters the company would likely start sales next year. U.S.-based Tesla has already imported Chinese-made vehicles into Canada.

Canada also aims to attract ⁠joint ventures and investments into the country’s EV supply chain.

Wang said Chinese EV makers were interested in setting up joint ventures, but would first focus on building sales and gauging market demand.

Carney’s decision to allow Chinese EV imports faced criticism from some U.S. officials and lawmakers.

TRADE EXPECTED TO SPIKE

During his January visit to China, Carney also said ​Canada ​would seek to increase its exports to China by 50% by 2030.

However, China’s Minister of ​Foreign Affairs Wang Yi said last month exports could increase ‌by 100%.

To double Canadian exports to China, they must increase nearly 15% annually for the next five years, Wang said, adding Canadian exports have already risen 27.5% in the five months since Carney’s visit.

“As we continue to move forward, our economic and trade cooperation continues to unleash the potential in our economies and continues to leverage the complementarities that we have, I think maybe we can go beyond the 100%, maybe, we can reach 200%,” he said.

Wang said Canada could supply nearly 22 million metric tons of crude oil to China annually, up from 15.5 million tons last year.

He said he saw “great potential” for China to ‌buy liquefied natural gas from Canada, without elaborating.

Wang said Canada, a major exporter of ​canola, peas and beef, supplies just 2% of Chinese agricultural imports, underscoring the huge market Canada ​can tap into.

“As long as we keep to the right track, ​at the right pace, towards the right direction, there will be a lot of potential for us to increase our trade,” ‌he said.

China cut tariffs in March on some Canadian products ​but left duties on canola oil at ​100% and pork at 25%. Tariff relief on products including canola meal, peas, and lobster expires at the end of the year, creating uncertainty for exporters.

Wang declined to say whether China would extend the tariff suspension or reduce tariffs on pork and canola oil.

“As long as the two countries ​uphold the principle of mutual respect, equality, reciprocity … there ‌will be nothing that we cannot resolve.”

But he warned Carney’s government must uphold the principles of mutual respect, seek common ground and ​pursue mutually beneficial outcomes.

“Whenever these principles are not followed, of course, there will be a negative impact,” he said.

(Reporting by Promit Mukherjee, ​Maria Cheng and Kyaw Soe Oo; Editing by Caroline Stauffer and Rod Nickel)