Canada and South Korea have signed a new agreement aimed at expanding South Korean automotive and electric vehicle (EV) manufacturing in Canada. The memorandum of understanding (MOU) comes as Seoul pursues a multibillion-dollar contract to supply Canada’s next generation of naval submarines.
The non-binding agreement, signed this week in Ottawa and reviewed by The Globe and Mail, commits both governments to working together on future mobility, including traditional auto manufacturing, EVs, batteries, and hydrogen-powered transportation.
According to the document, Canada and South Korea will collaborate on “advancing a Korean automotive industrial footprint in Canada” and exploring “electric vehicle (EV) manufacturing opportunities.” The agreement also highlights plans to expand “growing Korea’s battery manufacturing presence in Canada,” covering the entire supply chain from “manufacturing, critical mineral extraction and refinement, research, development and extraction.”
The timing is far from coincidental. Canada is currently evaluating two finalists for a massive submarine procurement program that could involve up to 12 diesel-electric vessels. One bid is led by South Korea’s Hanwha Group, while the other comes from a German-Norwegian partnership involving ThyssenKrupp Marine Systems. Ottawa has reportedly encouraged both bidders to facilitate auto-sector investments in Canada as part of their proposals.
Hyundai currently has no vehicle manufacturing operations in Canada, despite a brief and ultimately unsuccessful Quebec assembly venture in the late 1980s. However, South Korean firms are already deeply embedded in Canada’s EV supply chain. LG Energy Solution’s $5-billion NextStar Energy plant in Windsor, Ontario—built with Stellantis—began production in late 2025 and is expected to employ up to 2,500 workers.
