Hockey playoff brackets aside, the favourite predictions game these days in Canada might involve Chinese-made EVs. Specifically, which models will be the first to appear in our market as part of the new tariff-slashing Canada-China agreement.
Will we see truly affordable EVs from BYD, Chery and Geely in Canada before the year is out? A trickle of higher priced brand-positioning SUVs? A bunch of cheap Tesla Model 3s and nothing else? Time will tell, but everyone has an opinion it seems.
What’s the Canada-China trade deal?
That agreement created a quota system allowing up to 49,000 Chinese-built EVs into Canada annually, subject to a 6.1-percent tariff (the standard ‘most favoured nation’ rate), instead of the 100-percent rate otherwise slapped onto them.
The first 24,500 import permits became available on a first-come, first-served basis on March 1st. The quota is set to grow to 70,000 units annually by 2030.
In case you’re wondering, that odd 49,000 total was arrived at based on the total of Chinese-made EVs that were being imported into Canada before the 100-percent tariff was implemented in 2024. At that time, almost all were EVs produced in China by Tesla and Polestar.
New players
Things are obviously different now. While it’s true that the first EVs to come into Canada under the new deal are Lotus Eletres and Chinese-made Tesla Model 3s, there are more exotic things afoot.
We reported recently on the activities of Chery and of Geely’s premium division Zeekr, both of which have been taking steps to hire personnel who will guide the companies into the Canadian automotive retail market. Auto giant BYD is ahead of them both, having hired a consultancy firm to help it advance plans to establish 20 branded dealerships across Canada, starting with three GTA locations and moving outwards from there to Vancouver, Montreal and Calgary.
So what Chinese EVs might Canada get?
There’s been speculation, including by us, that the early wave of Chinese-made EVs imported into Canada may be higher-priced models, which deliver the higher margins needed to help pay for establishing a retail infrastructure in a new market. Given the costs of entering the Canadian market - homologation, logistics, regulatory compliance, marketing and the establishment of a distribution and after-sales service network, etc. - the first wave of Chinese EVs in Canada might look more like a brand-positioning offensive than involve an invasion of cheap electric vehicles.
On the other hand, Ottawa maintains that the new system is intended to encourage the arrival of more accessible models. It calls for the share of the quota reserved for so-called affordable vehicles—defined as EVs with an import price of $35,000 CAD or less—to reach 50 percent by 2030.
Keep in mind as well that there’s a distance to be traveled from actual import price to the final retail price shown at the dealership. Shipping costs, distribution fees, product positioning, manufacturer and dealer markups and regulatory thresholds will all contribute to nudging that retail price beyond the level consumers might consider “affordable”.
In practice, Canadian consumers might see interesting vehicles arrive, but they won't be priced like the LEAF or the new Bolt, for example. Here are some of the possibilities, as per a report by Electrek, with the outlet’s estimated Canadian selling price where given (subject to much variance, we point out):
- - BYD Seagull, a small urban hatchback ($30,000 CAD)
- - BYD Atto 3, a compact SUV ($42,000 CAD)
- - BYD Seal, a midsize sedan ($49,000 CAD)
- - Chery 5 EV, a compact crossover
- - Chery Jaecoo E5, a midsize SUV
We stress that, outside of Tesla, the other companies looking to take advantage of the opening created by the Canada-China trade agreement are still months away from handing over the fob to any of their EVs to a Canadian customer. But they’re coming.
