Canada and South Korea Explore Auto Partnership as BYD Accelerates Push into India

Two parallel shifts in global auto strategy emerged this week: Ottawa and Seoul signed a memorandum to deepen industrial cooperation across electric vehicles, batteries, critical minerals and related technologies, while China’s BYD is intensifying efforts to scale in India by altering its supply and assembly model. The Canada–South Korea memorandum establishes a binational industrial committee and a dedicated future-mobility forum intended to coordinate investment, technology-transfer and standards alignment; officials portray it as a framework to attract Korean production and battery-related processing to Canada rather than a set of binding factory commitments. Ottawa framed the initiative as a route to boost domestic EV-capable manufacturing — including cell production, materials refining and recycling — and to diversify North American supply chains amid trade friction with other partners. Seoul’s participation reflects reciprocal aims to secure upstream mineral access and to place assembly closer to major North American markets. Private-sector interest from Korean battery and related firms gives the plan momentum, but the memorandum’s non-binding legal status means outcomes will depend on implementation: public incentives, grid and transport upgrades, permitting speed and workforce development. In India, BYD’s rapid sales growth — roughly 88% in 2025 to about 5,500 units — has bumped against regulatory limits on fully built imports (2,500 units per model) and very high duties, prompting the company to study semi-knock-down (SKD) assembly as a way to shift some production steps locally and cut effective levies. SKD would lower BYD’s effective import costs on affected models from roughly 70% to around 30%, enabling faster deliveries, lower retail prices and relief for a multi-hundred-unit backlog. Both developments fit a broader reorientation in which middle powers and fast-moving EV entrants re-route manufacturing footprints: Canada’s framework is an industrial-policy response to supply-chain resilience and high-value job creation, while BYD’s SKD move is a tactical adaptation to India’s tariff and quota environment. Execution risks are substantial in both cases — from the technical scale-up of cell plants and supplier networks in Canada to approvals and dealer-network adjustments in India — and early indicators will be concrete investment announcements, committee mandates, permitting timelines, and regulatory approvals for localized assembly. If implemented, the Canada–Korea cooperation could shift higher-margin EV value-chain activity northward; if India permits expanded SKD operations, BYD could accelerate market share gains and price competitiveness. Policymakers must balance near-term benefits of expanded vehicle availability with long-term industrial strategy to ensure that cheaper imports do not undercut domestic manufacturing objectives.