UBS: Despite trade barriers, Chinese electric vehicles still pose a threat to American automakers

LootboxPhobia · 2026-04-06T15:59:04+00:00

Stellantis is in discussions with Chinese Leap Motor about the possibility of manufacturing electric vehicles in Canada, facing U.S. tariffs and legal hurdles. The Ontario Premier expressed opposition to the agreement, and Trump threatened to impose a 100% tariff if the deal goes through. Ford Motor CEO stated that the company needs to address potential competition and plans to surpass it through innovation.

LootboxPhobia

2026-04-06 15:59:04

Abstract generation in progress

Investing.com - Citing UBS and a report by Bloomberg, Stellantis is holding early discussions with its Chinese partner, Leapmotor, regarding the production of electric vehicles at an idle assembly plant in Ontario, Canada. Canada and China reached an agreement in January 2026 to lower tariffs on Chinese-made electric vehicles.

Due to 100% tariffs and a law prohibiting the use of China-related software in connected vehicles, selling Chinese electric vehicles in the United States remains extremely challenging. Reports say that President Trump and China’s top leaders may discuss these barriers at the May summit. In January 2026, Trump said that if Chinese automakers open factories in the United States and use American workers, he may be open to Chinese automakers entering the U.S.

Ontario Premier Doug Ford said he would oppose any agreement between Stellantis and Leapmotor to produce electric vehicles in Canada unless local parts are used. Trump threatened that if Canada reaches an agreement with China, he will impose 100% tariffs on all Canadian goods. UBS said this could also apply to Mexico and, citing recent news, that General Motors plans to produce vehicles in Mexico with its Chinese joint-venture partner.

Jim Farley, CEO of Ford Motor Co., told UBS that the company must be prepared for any potential outcomes, including Chinese automakers entering the U.S. Farley said the company plans to win by winning customers and out-innovating the competition, which is why the company is still using its new UEV platform to advance its electric vehicle plans. Farley denied a Bloomberg report that Ford is discussing with the U.S. government setting up a joint venture between the U.S. and China in the U.S.

UBS believes that as long as Section 232 remains in effect, the impact on the auto industry of any potential new steel and aluminum tariff framework will be limited. Ford expects that aluminum tariffs and logistics will bring an adverse impact of between $1.5 billion and $2.0 billion, as the company purchases aluminum from tariff countries after Novelis suspends operations.

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