Canada and South Korea have signed a memorandum of understanding to pursue Korean automotive manufacturing in Canada. Industry Minister Mélanie Joly and her counterpart Jung-Kwan Kim agreed to cooperate on a Korean auto footprint, domestic electric vehicle production, batteries and critical minerals, and to set up a joint industrial cooperation committee.
A forum, a committee and a footprint
The agreement, announced Jan. 29, 2026, followed a meeting earlier in the week between Joly and a delegation led by Hoon-Sik Kang, presidential special envoy for strategic economic cooperation and chief of staff to South Korea’s president.
Joly and Jung-Kwan Kim, South Korea’s minister of trade, industry and resources, signed an MOU on strengthening Canada-Korea industrial collaboration on future mobility and establishing a Canada-Korea Industrial Cooperation Committee. A forum on industrial collaboration for future mobility will also be established.
The stated intention is specific: cooperate on advancing a Korean automotive industrial footprint in Canada and on advancing domestic electric vehicle manufacturing opportunities. Ottawa says the deal deepens the Canada-Korea Comprehensive Strategic Partnership, with its focus on economic prosperity and supply chain resilience.
Joly said the agreement will grow Canada’s auto sector, create good jobs and reinforce Canada’s position as a global leader in future-ready vehicle manufacturing.
Batteries and critical minerals are in the text
The auto pledge does not stand alone. The Government of Canada says it is attracting new investments that reinforce Canada’s battery supply chain by supporting cooperation in battery production, battery-materials processing and the refinement, processing and recycling of Canadian critical minerals. The two sides also discussed collaboration in auto and battery manufacturing, critical minerals and artificial intelligence, along with wider trade opportunities.
That matters because a vehicle plant without a battery chain behind it would leave much of the value elsewhere. Korean firms are already central to global battery production, and Canada’s pitch has long been that its minerals, energy and existing auto workforce belong in the same supply chain.
Why Ottawa wants a sixth automaker
The timing is defensive as much as it is ambitious. Canada’s auto sector, concentrated in southern Ontario around five existing automakers — Ford, General Motors, Stellantis, Honda and Toyota — has faced production cuts and layoffs under U.S. tariffs, and Ottawa is looking for new investment that is not tied to the American market alone.
The commercial case rests on sales Korean companies already make here. In 2024, 12 per cent of all cars sold in Canada, or 228,257 vehicles, were made by South Korean automotive companies — yet none of those vehicles is built in Canada. Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, pitched the delegation directly at a Canada-Korea auto forum in Toronto, arguing the business case now exists to build a plant in Canada, perhaps making electric vehicles, and to build where they sell.
What the deal does not do
An MOU is not a plant announcement. The agreement is non-binding: it pledges both sides to work together, creates the committee and forum to do it, and names no site, company investment figure or production date.
It also arrives with a second negotiation in the background. South Korea is campaigning to win the multibillion-dollar contract to build Canada’s next generation of patrol submarines, and Hyundai and Hanwha Ocean representatives were part of the delegation in Ottawa. Whether the auto discussions produce a factory will depend on what follows the signatures — but Ottawa has now put the ask, and the machinery to pursue it, on the public record.
