Tesla is expected to gain early benefits from Canada’s decision to remove 100% tariffs on Chinese-made electric vehicles. Industry experts say the move could reshape the Canadian EV market. It may also improve vehicle availability and pricing.
Canada’s new EV Policy allows limited imports of electric vehicles from China under revised trade terms. Under the agreement, Canada will permit up to 49,000 EV imports each year. These vehicles will face a reduced tariff of 6.1 percent under most-favoured nation rules.
The agreement was announced last Friday. Auto industry analysts say the policy could quickly restart halted exports. Sam Fiorani, Vice President of AutoForecast Solutions, said exports could resume without major delays. He noted that manufacturers already have supply chains in place.
Canadian Prime Minister Mark Carney said the quota may increase over time. He stated that imports could reach 70,000 vehicles annually within five years. This expansion depends on market demand and regulatory reviews.
A key part of the EV Policy is pricing. Half of the import quota is reserved for EVs priced below 35,000 Canadian dollars. This rule excludes all current Tesla models from that specific category. However, Tesla still stands to benefit through other segments.
Tesla has a strong advantage due to its existing operations. In 2023, the company upgraded its Shanghai factory. It began producing a Canada-specific version of the Model Y. That plant is Tesla’s largest and most cost-efficient facility.
Later that year, Tesla started shipping Model Y vehicles from Shanghai to Canada. This move sharply increased vehicle imports from China. Imports through Vancouver rose by 460 percent year over year.
In 2024, Tesla paused those shipments. Ottawa had imposed high tariffs at that time. Tesla then switched exports to its Berlin factory to serve the Canadian market.
Many of Tesla’s lower-priced models are still produced in China. The Model 3 is one example. The revised EV Policy could allow Tesla to return to Chinese exports if conditions remain favorable.
Tesla also has a strong retail presence in Canada. The company operates 39 stores nationwide. This gives it an edge over Chinese rivals like BYD and Nio. Those brands currently lack direct sales networks in Canada.
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Experts say Tesla’s infrastructure and brand recognition position it well. While Chinese automakers may enter the market, Tesla already has customer trust. The policy change could strengthen Tesla’s long-term growth in Canada.
