Canada Slashes Tariffs on Chinese EVs; Tesla and Volvo Among First Beneficiaries

Canada recently announced a trade agreement with China that allows 49,000 Chinese-made electric vehicles (EVs) annually to enter the country at a reduced tariff rate of 6.1%, replacing the previous punitive 100% tariff. The move aims to secure concessions from China on canola trade and attract long-term investment from Chinese companies. According to Bloomberg analysts, initial beneficiaries will primarily be automakers already certified for the North American market, including Tesla, Volvo (owned by Geely), and Polestar. Tesla exported over 44,000 EVs to Canada in 2023, while Volvo, Polestar, and the premium brand Lotus are also expected to significantly lower their prices due to the reduced tariffs. Additionally, the agreement stipulates that by 2030, half of the quota will be allocated to vehicles priced below CAD 35,000, benefiting mass-market brands like BYD. Canada’s Ministry of Transport has also pledged to complete certification for new models within eight weeks, accelerating the entry of more Chinese EVs into the market.