The reduction in tariffs on Chinese vehicle imports to Canada is expected to significantly lower costs, potentially boosting the sales of electric vehicles (EVs). While the existing charging network and power grid in Canada are deemed capable of handling the increased demand, experts emphasize the need to address gaps and challenges as the country’s EV fleet grows.
Under the new trade agreement, China can export up to 49,000 EVs annually to Canada at a reduced tariff rate of 6.1% instead of the previous 100%. This adjustment is anticipated to make a larger number of Chinese EVs accessible to Canadian consumers at more competitive prices.
Despite concerns about the influx of Chinese EVs, the figure of 49,000 represents only a modest three percent of annual auto sales, similar to the number of Chinese EVs sold in Canada in 2023 and 2024 before the imposition of the 100% tariff. Moreover, these vehicles constitute just 19% of the 264,000 zero-emission vehicles sold in Canada in 2024, indicating that the majority of EVs will continue to be sourced from elsewhere.
Experts suggest that while Chinese imports may initially impact EV sales positively, the long-term growth trajectory of EV adoption in Canada remains robust. Projections indicate that by 2040, four out of five light-duty vehicles sold are expected to be zero-emission, irrespective of the introduction of Chinese EVs.
The potential effects of Chinese EVs on the market dynamics are uncertain, with opinions divided on whether they will supplement or compete with existing EV models. The Canadian government has specified that half of the import quota will be reserved for vehicles priced below $35,000 by 2030, without clarifying any quota adjustments in the near future.
Experts point out that the availability of lower-cost Chinese EVs has spurred competition in other markets, leading to increased options for affordable EVs. The introduction of more Chinese EVs could also drive down prices of used EVs, expanding the market to a wider range of buyers.
While Canada’s current charging infrastructure is deemed sufficient to accommodate the anticipated increase in EVs, gaps in infrastructure, particularly in remote areas and multi-unit buildings, need to be addressed to facilitate further EV adoption. Additionally, experts emphasize the importance of supportive government policies to drive EV adoption, such as the implementation of EV availability standards.
