More than 2,900 electric passenger vehicles manufactured in China were imported into Canada in May. According to data from Global Affairs Canada, this marked the first month of electric vehicle imports from China following an agreement by Prime Minister Mark Carney to allow tens of thousands of these vehicles into the country at a reduced tariff rate during a visit to China in January.
In May, 2,910 cars arrived in Canada, with more expected to follow. Although the specific brands and models were not disclosed, Carney mentioned at the Economic Club of New York that the majority of the incoming models are likely to be Chinese-made Teslas.
A tariff-quota agreement on electric vehicles between Ottawa and China was reached, with Beijing agreeing to reduce certain duties on Canadian canola in exchange for the deal.
Previously, Canada had imposed a 100% tariff on Chinese electric vehicles; however, the current arrangement allows for up to 49,000 Chinese EVs to enter Canada annually at a 6.1% tariff, with a maximum quota of 24,500 cars over six months.
The revival of federal EV rebates and escalating gas prices due to geopolitical tensions are prompting more drivers in Canada to consider switching to electric vehicles. Electric Mobility Canada, an organization advocating for electric vehicles, believes that the increasing availability of Chinese-made EVs in the Canadian market will lead to price reductions, citing examples like the Chevy Bolt.
Meanwhile, Canada’s major automakers expressed concerns about the influx of Chinese EVs, stating that it undermines the domestic auto industry and exposes Canadians to cyber risks. Brian Kingston, the president and CEO of the Canadian Vehicle Manufacturers Association, highlighted China’s divergence from established trade and investment principles that have traditionally supported the success of the auto industry and the Canadian economy.