Over 2,900 electric passenger vehicles manufactured in China were delivered to Canada in May. Information from Global Affairs Canada revealed that May marked the first month of electric vehicle imports from China following Prime Minister Mark Carney’s agreement to allow tens of thousands of these vehicles into the country at a reduced tariff rate during a visit to China in January.
The data indicated that 2,910 cars were imported in May, with more expected to arrive soon. Although specific brands or models were not disclosed, Carney mentioned at the Economic Club of New York recently that most of the incoming models are likely to be Teslas produced in China.
In exchange for Beijing reducing certain duties on Canadian canola, Ottawa struck a tariff-quota agreement with China regarding electric vehicles (EVs).
Canada previously imposed a 100% tariff on Chinese EVs, but now permits up to 49,000 of these vehicles to enter the country annually at a tariff rate of 6.1%. Furthermore, there is a maximum quota of 24,500 cars within a six-month period.
The reintroduction of federal EV rebates along with escalating gas prices due to tensions in Iran has led to increased interest in electric vehicles, according to Electric Mobility Canada. Daniel Breton, the President and CEO of Electric Mobility Canada, noted that rising competition is benefiting consumers by potentially lowering prices, citing examples like the Chevy Bolt.
Electric Mobility Canada anticipates that the influx of Chinese-made EVs into Canada will contribute to price reductions in the market.
Canada’s major automakers – Ford, General Motors, and Stellantis – expressed concerns about the arrival of these EVs, asserting that it poses a threat to the domestic auto industry and exposes Canadians to cyber risks. Brian Kingston, President and CEO of the Canadian Vehicle Manufacturers Association, highlighted China’s departure from established trade and investment principles critical to the success of the auto industry and the Canadian economy.