Magna International, a Canada-based auto supplier and global auto manufacturer, has commented on the potential for Chinese EV production in Canada — weeks after a new deal between the two countries opened the doors to that possibility.
During a state visit to Beijing, Prime Minister Mark Carney announced in mid January that Canada would allow the annual import of 49,000 electric vehicles at a reduced tariff of just 6.1% — in exchange for lower duties on Canadian agricultural products.
Upon announcing the deal, Carney said “it is expected that within three years, this agreement will drive considerable new Chinese joint-venture investment in Canada with trusted partners to protect and create new auto manufacturing careers for Canadian workers, and ensure a robust build-out of Canada’s EV supply chain.”
Magna said that it is still evaluating its strategy, while remaining prepared to support its Chinese customers in markets where it already has established operations and expertise.
Magna in China
The company, which has recently partnered with two Chinese automakers to build vehicles in Europe as they seek to avoid high EV import tariffs, has operated in China for nearly three decades.
As global carmakers expanded manufacturing in China, Magna historically supplied Western automakers, including Detroit-based General Motors, and German-headquartered BMW and Volkswagen.
More recently, its customer base has began shifting toward domestic Chinese carmakers and EV manufacturers such as Geely, BYD, Xiaomi, among others, according to its website.
According to Magna’s CEO Swamy Kotagiri in the firm’s latest earnings call, as Chinese companies “come to different parts of the world, we hope to grow with them.”
“We are producing in China for China and international OEMs, right? Of the total revenue that we have from China, about 65% comes from Chinese OEMs,” the Chief Executive Officer noted.
“The reason I make that point is: we are in their ecosystem,” he said, adding that “as they come to different parts of the world, you know, we hope to grow with them,” as they have done “in the past as Europeans came to North America, 15, 20 years ago.”
The CEO sees Chinese companies’ intentions to “start producting locally, wherever that is in the world,” as an opportunity for the manufacturer, as long as it is present there.
Chinese EVs in Europe
The company flagged the importance of its Magna Steyr facility in Graz, Austria, which is an example of a “bridge” between Magna and Chinese automakers.
Chief Financial Officer Phil Fracassa told Automotive News Canada on Wednesday that “until they get to the point of building full plants in Europe, they need help with tariffs, and so, we’ve got some business in our complete vehicles unit.”
Last November, both state-owned GAC Group and Guangzhou-based XPeng began manufacturing electric vehicles in the Magna Steyr facility, located in Graz, Austria.
XPeng began producing its G6 model there, with the new P7+ being added earlier this year. The sedan was launched simultaneously across 36 markets, including most European ones.
GAC also said it would build its electric Aion V model in Graz, a strategy that helps it avoid EU tariffs of up to 37.6% on its EVs.
During the earnings call, Magna’s CFO stated that the company’s 2027 outlook hinges on their sales benefiting from the launch of several new programs — which include XPeng and GAC production in Graz.
“This should be offset partially by expected lower light vehicle production in North America and China, and the end of production of certain programs, including the BMW Z4 and Toyota Supra that we assemble in Graz,” he further explained.
Jaguar‘s E-PACE model was also produced in Magna Steyr’s facility, before the company ultimately ended production of all models in late 2024 to work on its redesigned product lineup.
Production in Canada
While Magna International has considered replicating its contract-assembly model in North America for several years, it has no immediate plans to do so.
Fracassa said Magna Steyr will remain focused on its main plant in Graz, even though it will continue to “look at business opportunities as they come.”
The same cautious approach applies to any potential involvement in a Chinese joint venture in Canada.
A few weeks ago, federal Industry Minister Mélanie Joly highlighted Magna International, along with other major Canadian suppliers, as potential candidates to support manufacturing partnerships between Chinese EV companies and so-called “trusted partners.”
However, Fracassa said such a move is not likely, despite not having written it off entirely.
Speaking with the outlet, the executive noted that Magna “is proud to be a Canadian company,” however, its approach “has always been to be a neutral global partner to our OEMs.”
“So, we’ll support customers in various ways, but we try to avoid a structure that could appear exclusive or tied to any individual customer,” Fracassa added.
At the same time, Magna plans to support its Chinese customers as they expand into markets where the supplier already has an established presence and experience.
