Canada’s auto market is officially open to Chinese EVs, but you won’t see cheap models right away
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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 Chery EV on Canadian roads any time soon.
According to industry watchers, it’s likely that more familiar brands will come to Canada first.
“If it’s a brand that’s already imported into Canada, like Polestar, Volvo or Tesla, Chinese EVs are already coming,” said Peter Fries, a professor of mechanical and automotive engineering at the University of Windsor.
“If people are really interested in a low-cost EV, or a brand that is not currently imported into Canada, the process will take longer,” he explained.
Chinese electric vehicles – including major brands like BYD, Chery and Geely – sell at low retail prices due to cheap materials, low labor costs and Chinese government industry subsidies.
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 lot of capacity for manufacturing. So they can make about 40 million cars a year and they only sell 20,000 or 25,000 cars at home,” Fries said.
Those companies need to export to other countries to keep their factories busy. But with 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 Fries.
“If they can only export a certain number of vehicles to Canada per year, would they want to export the same number of less expensive, lower profit vehicles, or the same number of more expensive, higher profit vehicles? They would choose the higher profit vehicles.”
The Canadian government has agreed to initially allow 49,000 Chinese electric vehicles to be brought onto the market at a tariff rate of 6.1 per cent – a measure that preceded Ottawa imposing 100 per cent tariffs on all Chinese EVs in 2024. Automotive journalist Greg Leeson joins Hanumansing Tonight to answer audience questions on Chinese EVs in Canada.
Adesu Lashitue, associate professor of strategic management at McMaster University, told CBC News in an email that Teslas, Polestars and Volvos could arrive this month or next. He agreed that the permission process for Chinese brands would take more time.
“Nevertheless, Canada may have an incentive to streamline these processes to reduce the risk of reciprocal delays by China in restoring canola market access,” he explained.
“On that basis, it is plausible that the majority of the 24,500 EV imports scheduled for the March to August period will include existing models from Tesla, Volvo and Polestar, while new Chinese brands may appear more from the summer onwards.”
How the approval process works
During previous correspondence with CBC News, Transport Canada said any vehicle made in China and going on sale in Canada must comply with the Motor Vehicle Safety Act and Canada Motor Vehicle Safety Standards.
Once they comply with those rules, vehicle manufacturers can register with Transport Canada Appendix G Pre-clearance ProgramA database of foreign manufacturers.
According to Transport Canada, the purpose of that program is to “make border processes more efficient for Canadian commercial importers by registering foreign manufacturers who certify vehicles as conforming to Canadian regulatory requirements”.
That evaluation includes inspection of the lighting system, brakes, windshield wipers and other auto parts, Freeze said, but testing could take weeks or months. BYD is the only Chinese EV to receive this approval due to previous applications to sell taxis and buses in the Canadian market; It is unclear how this will affect future imports.
CBC News contacted Transport Canada to ask about the approval timeline for imported vehicles, and was referred to Global Affairs, which did not respond by deadline.
Similarly, CBC contacted several Chinese auto makers, including Chery and Xiaomi, to ask whether they had submitted applications for approval. Neither company responded by deadline.
And while Tesla did not respond to a request for comment, a spokesperson for Polestar said the company is “currently evaluating the ongoing development.”
