New cars, among them Chinese-built electric vehicles from BYD, in Zeebrugge, Belgium, in 2024. Chinese automakers have some adapting to do, but expect their electric vehicles in Canada in relatively short time.Yves Herman/Reuters
Even through the narrow slit of Ottawa’s new, low trade quota, Chinese-made cars are likely to speed Canada along the path toward $35,000 electric vehicles.
Canada’s recent trade deal with Beijing will allow an initial 49,000 Chinese-made EVs into the Canadian market with a tariff rate of 6.1 per cent. That’s down from the 100-per-cent duty Ottawa slapped on Chinese EVs in 2024, matching U.S. policy. The import ceiling will rise gradually every year, reaching 70,000 in five years, Prime Minister Mark Carney has said.
Although details of the agreement are still scarce, the deal also earmarks part of the quota for EVs with price tags of $35,000 or less. By 2030, those low-cost vehicles will account for half of China’s allotment, according to Global Affairs Canada.
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The quota is too small to translate into a cheap-car bonanza for Canadian car shoppers. But it is likely to increase competition among automakers, in China and elsewhere, to make $35,000 EVs fit for the Canadian market, experts say.
The first Chinese-made vehicles to reach the Canadian market will be those made by Western automakers with Chinese production lines, chiefly among them, Tesla Inc., said Daniel Ross, senior manager of industry insights and residual value strategy at Canadian Black Book.
A Tesla car charges at a Supercharger charging station in Beijing, March 24, 2025. Tesla faces pressure to make stripped-down, more affordable EVs to compete in Canada.Florence Lo/Reuters
Elon Musk’s EV behemoth, along with Volvo and Buick, are already set up to make vehicles that meet Canada’s safety, environmental and technical standards, Mr. Ross said. On the other hand, Chinese automakers such as BYD Auto Co. Ltd., Nio Inc. and Chery Automobile Co. Ltd. will have some adapting to do, which will take time, he added.
But even with that advantage out of the gate, Tesla, in particular, which has talked about producing a cheaper, stripped-down Model 3, would be under pressure to come up with more basic trims as it races against Chinese brands, Mr. Ross said.
Yet China’s own brands won’t take long to show up in Canada, he added.
“Those carmakers move quickly.”
Cue China’s meteoric rise in the Britain, where BYD’s share of new car registrations now rivals Germany’s Audi and BMW AG, according to the Society of Motor Manufacturers and Traders. In 2024, the country surpassed Japan to become the world’s largest exporter of cars.
Chinese brands also have the advantage of history, said Robert Karwel, director of customer success at J.D. Power in Canada. They’re unlikely to repeat mistakes made by other once-newcomers to the Canadian market.
Mr. Karwel recalled the case of Hyundai Motor Co.’s ill-fated Pony as an example. The budget hatchback burst through sales projections at first in the mid-1980s, only to be taken off the market a few years later owing to poor quality and reliability concerns. The blunder probably hobbled Hyundai’s foray into Canada for years thereafter, Mr. Karwel added.
It’s one reason why China’s no-frills EVs – such as BYD’s Seagull, which sells for around US$12,000 ($16,644) in China – are unlikely to make it to Canada’s shores. A second reason is that selling ultracheap cars is a volume game. You need large sales for business margins to make sense, Mr. Karwel said.
Instead, Chinese automakers will want to build their brands in Canada by focusing on models that meet North American expectations in terms of features, style and size, he added. They’re most likely to compete with compact and subcompact SUV segments, which, together, currently make up about half of the Canadian market, he said.
The BYD Atto 2, for example, would likely sell in the high $30,000 range, he said. The larger BYD Atto 3, as well as the Leapmotor C10, would likely retail in the low- to mid-$40,000s.
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In Canada, the 10 lowest-priced EVs averaged $45,000 after manufacturer rebates last year, Mr. Karwel said. He reckons Chinese producers will be able to beat those prices by 10 to 15 per cent, meaning prices in the range of $40,000 and down to just under the $35,000 benchmark set by Ottawa.
Those prices still won’t be low enough to compete with the most budget-friendly gasoline-powered options in Canada.
Some consumers will also be put off by concerns about cybersecurity. Conservative Leader Pierre Poilievre has warned of Chinese EVs “roving surveillance operations,” while Ontario Premier Doug Ford has dubbed them “subsidized spy cars.”
More recently, Mr. Ford has also called on Canadians to boycott made-in-China vehicles in a show of support for Canada’s domestic auto sector.
China’s poor record on human rights and labour standards may also give pause to some car shoppers, Mr. Ross said.
But lower prices should still be enough to rekindle Canadians’ interest in buying EVs, which has been cooling lately, particularly after the end of federal incentives early last year, he added.
It will also put pressure on North American incumbents to works toward their own $35,000 EVs, he said.
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