Chery (HKEX: 9973) is considering local production in Canada, deepening its presence in the North American market beyond a planned sales launch in 2027.

Options under consideration include taking over idle capacity at existing plants and building factories with partners, executive vice president Zhang Guibing said in an interview at Chery's headquarters in Wuhu, Anhui province, Bloomberg reported on Friday.

Canada is a market worth establishing manufacturing operations in even without access to the US, Zhang said, adding that the company is looking for suitable opportunities and discussing possible arrangements.

Chery is assessing idle capacity in Canada and speaking with local investors interested in Chinese automakers, Zhang said, without identifying any companies.

The potential investment would support Canada's efforts to attract capital to its auto industry, but could also heighten trade tensions with the US, the report noted.

Hefty tariffs and technology restrictions currently keep Chinese EVs effectively out of the US market, and American officials have made clear that Chinese-brand vehicles will not be allowed to enter through Canada, Bloomberg noted.

Canada's changes to its import policy for China-made EVs this year have opened opportunities for Chinese automakers to expand in the country and spurred discussions about local production.

Under an agreement Canada reached with China in January, an initial annual quota of 49,000 China-made EVs can be imported at a most-favored-nation tariff rate of 6.1%. The quota will increase each year.

Canadian Industry Minister Melanie Joly visited China in June and met with representatives from BYD, Geely and Chery, saying at the time that the companies were willing to explore joint ventures.

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