Canada’s auto market is officially open to Chinese EVs, but you won’t see

The Canadian auto market officially opened to Chinese-made electric vehicles on March 1. But that doesn’t mean you’ll be able to drive a BYD or a Chery EV on Canadian streets anytime soon.

Chances are more familiar brands will hit Canada first, according to industry watchers.

“If it’s a brand that is already imported to Canada, like a Polestar, a Volvo or a Tesla, then Chinese EVs are already coming,” said Peter Frise, a professor of mechanical and automotive engineering at the University of Windsor.

“If people are interested in one of the really low-cost EVs, or a brand that is not currently imported to Canada, then the process would take longer,” he explained.

Chinese electric vehicles — including marquee brands like BYD, Chery and Geely — tend to sell at a lower retail price due to cheaper materials, low labour costs and industry subsidies from the Chinese government.

However, non-Chinese brands like Volvo, Polestar and Tesla also manufacture in China, and could potentially benefit from the EV deal announced by Prime Minister Mark Carney in January.

“Chinese companies have a great deal of overcapacity for manufacturing. So they can make something like 40 million cars a year and they only sell about 20,000 or 25,000 within their own country,” said Frise.

Those companies need to export to other countries to keep their factories busy. But with a limit of 49,000 Chinese-made EVs allowed into the Canadian market at a 6.1 per cent tariff rate, the Chinese auto industry will be strategic in choosing which models to export, according to Frise.

“If they can only export a certain number of vehicles per year to Canada, are they going to want to export that number of less expensive, lower profit vehicles, or that number of expensive, higher profit vehicles? They’ll go for the higher profit vehicles.”

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The Canadian government has agreed to initially allow 49,000 Chinese electric vehicles into the market at a tariff rate of 6.1 per cent — a measure that had been in place before Ottawa put a 100 per cent tariff on all Chinese EVs in 2024. Automotive journalist Greg Layson joins Hanomansing Tonight to answer viewer questions on Chinese EVs in Canada.

Addisu Lashitew, an associate professor of strategic management at McMaster University, told CBC News in an email that Teslas, Polestars and Volvos could arrive as soon as this month or next. He agreed that the permitting process will take longer for Chinese brands.

“Still, Canada may have an incentive to streamline these procedures in order to reduce the risk of reciprocal delays by China in restoring canola market access,” he explained.

“On that basis, it is plausible…