In May, over 2,900 electric passenger vehicles manufactured in China were imported into Canada. Global Affairs Canada data reveals that these imports mark the first influx of electric vehicles from China following Prime Minister Mark Carney’s agreement to allow tens of thousands of these vehicles at a reduced tariff rate, which was negotiated during his visit to China in January.
While the exact brands and models of the imported vehicles have not been specified, Carney mentioned during a recent Economic Club of New York event that a significant portion of the incoming models are anticipated to be Chinese-made Teslas. This agreement was part of a deal between Ottawa and Beijing, where China agreed to drop certain duties on Canadian canola in exchange for a tariff-quota agreement on electric vehicles.
Previously, Canada had imposed a 100% tariff on Chinese electric vehicles, but the current arrangement allows for up to 49,000 Chinese EVs to enter Canada each year at a 6.1% tariff rate. Additionally, there is a set maximum quota of 24,500 cars over a six-month period.
Electric Mobility Canada has noted a growing interest in electric vehicles among Canadian drivers, attributed in part to the reintroduction of federal EV rebates and rising gasoline prices due to geopolitical tensions. The organization’s president, Daniel Breton, believes that the influx of Chinese-made EVs will lead to price reductions in the market, citing examples like the decreasing cost of vehicles such as the Chevy Bolt.
Despite the potential benefits for consumers, Canada’s major automakers, including Ford, General Motors, and Stellantis, have expressed concerns over the impact of these imported EVs on the domestic auto industry, warning about cybersecurity risks associated with vehicles originating from China. Brian Kingston, CEO of the Canadian Vehicle Manufacturers Association, highlighted the lack of adherence to established trade and investment principles by China, which could pose challenges to the Canadian economy.
The arrival of Chinese-made electric vehicles in Canada has the potential to reshape the country’s automotive landscape and fuel consumer choices as the market adapts to evolving trends in electric mobility.