Canada to allow 49,000 Chinese EVs annually at reduced 6.1% tariff
Lotus expects 50% price drop on Eletre SUV under new policy
BYD and other Chinese EV makers may gain access to Canadian market by 2030.
Canada’s new trade agreement with China will reduce import tariffs on Chinese electric vehicles, enabling automakers such as Tesla, Volvo, and Lotus to gain early access to the Canadian market under more favourable terms.
This answers one question that crossed our minds last week when the deal with China was announced: Will we actually see BYD-, Cherry- or MG-branded EVs on Canadian roads or will established brands that build in China benefit from the tariff cut?
The deal, confirmed late last week, permits the annual import of 49,000 electric vehicles from China at a 6.1% tariff rate, down from the previous 100%. In return, Canada received trade concessions on canola exports.
The revised tariff structure benefits automakers with existing North American certification, at least from the onset. Tesla, which imported more than 44,000 Chinese-made EVs into Canada in 2023, is expected to resume imports at scale. Volvo and Polestar, both controlled by China’s Geely, are also positioned to take advantage of the change.
A Transport Canada official, who requested anonymity, said the department will certify new Chinese EVs within eight weeks as part of the streamlined process.
Geely, the Chinese parent company of multiple EV brands, said the tariff reduction will affect its brands differently but characterized the change as positive overall. Polestar declined to comment. Tesla did not respond to requests for comment.
Geely-controlled luxury brand Lotus said the agreement could halve the price of its Eletre SUV in Canada. The vehicle, currently priced at over $310,000, is one of the few high-end China-made EVs available in the Canadian market.
The policy shift could, however, open the door for wider participation from other Chinese automakers. BYD, the world’s largest EV manufacturer, which has recently displaced Tesla, currently has limited sales in Canada but may benefit from the revised tariff structure. According to the terms of the agreement, 50% of the import quota must be priced at $35,000 or less by 2030 to support access to lower-cost options.
The Canadian deal follows recent decisions by the European Commission to ease tariffs on Chinese EVs, in contrast to the more protectionist trade policies proposed by U.S. President Donald Trump. The divergence may further reshape North America’s EV market if Chinese automakers establish long-term operations in Canada.
Source: Automotive News
