Canada and China have finalized an agreement to lower import tariffs on electric vehicles, a move expected to streamline market access and benefit several major automakers. Under the deal, Transport Canada will accelerate certification of eligible Chinese-made EVs, completing the process in as little as eight weeks. The agreement caps annual imports at 49,000 vehicles subject to a most-favored-nation tariff rate of 6.1 percent.
Analysts anticipate that manufacturers already certified for North American sales will be the earliest beneficiaries. These include Tesla and Geely’s Volvo Car and Polestar brands, which have rapidly expanded overseas operations. Tesla notably imported more than 44,000 EVs into Canada in 2023, before the temporary imposition of 100 percent tariffs in 2024.
Other Chinese automakers are also expected to enter the Canadian market more quickly under the streamlined approval process. A government official familiar with the agreement indicated that the eight-week certification timeline will lower logistical and regulatory barriers for new entrants. Geely has described the tariff reduction as broadly positive across its portfolio, though individual brand impacts will vary.
BYD, the world’s largest producer of new energy vehicles, currently registers minimal sales in Canada but stands to gain from reduced duties on its mass-market models. The company has been present in Canada since 2013 and opened its Ontario bus assembly plant in 2019. Market observers believe the tariff cut will support BYD’s efforts to strengthen its North American footprint.
Sports car maker Lotus, also controlled by Geely, expects the tariff reduction to halve the planned local price of its Eletre SUV, potentially boosting sales through its six Canadian dealerships. Chinese EV maker NIO has likewise signaled intentions to deepen its market presence overseas through its sub-brand Firefly, which has already targeted Europe and Asia.
The Canadian government noted that more than half of the approved import slots are expected to accommodate electric vehicles priced below C$35,000 within five years, reinforcing efforts to improve affordability and choice in the national EV market.
Source: CNEV Post
