Canada Cuts China-Made EV Tariffs, Tesla Seen as Early Winner

Gotrade News - Canada is opening a new lane for Chinese-made EV imports after rolling back tariffs that previously sat at 100%. The shift puts one name in the spotlight as an early winner: Tesla.

Key Takeaways:

• Canada will allow up to 49,000 China-made EV imports per year at a 6.1% tariff.

• Tesla could move fast because it previously shipped from Shanghai and has 39 stores in Canada.

• A price cap clause may give Chinese brands an edge in entry-level EV demand.

Reuters reported Canada will allow up to 49,000 vehicles a year to be imported from China under most-favoured nation terms, with a 6.1% tariff. Prime Minister Mark Carney said the quota could rise to 70,000 vehicles within five years.

One detail could shape who benefits most. Half of the quota is reserved for vehicles priced under 35,000 Canadian dollars.

Even with that constraint, Tesla may still have a head start. Since 2023, its Shanghai plant has been set up to build a Canada-specific version of the Model Y.

Shipments from Shanghai to Canada briefly ramped up and showed up in import figures tied to the Port of Vancouver. In 2023, automobile imports from China to Vancouver jumped 460% year on year to 44,356 vehicles.

That flow stopped in 2024 after Ottawa imposed 100% tariffs on Chinese-made EVs. Tesla now supplies Canada with Model Y units produced in Berlin, while several Model 3 variants are mostly built in China.

Why Tesla could win early

If the new rules run smoothly, exports from Shanghai could restart relatively quickly. The drivers are product readiness, Shanghai’s scale, and the flexibility to route supply across factories.

Tesla also has an established retail footprint in Canada. It operates 39 stores, while Chinese rivals such as BYD and Nio still lack a meaningful sales presence.

A smaller model lineup can also be a strategic advantage. With fewer core models, Tesla can adjust sourcing and variants faster to protect cost efficiency.

What it means for EV investors

Even if Tesla wins early, the price clause gives Chinese brands breathing room. The sub-35,000 CAD segment could become the main entry point for entry-level EV demand.

For investors, the key isn’t just the headline quota, but execution. Factory allocation, logistics costs, and how quickly rivals build distribution will decide who captures this opening.

There’s also a geopolitical layer. Trump administration officials criticised Canada’s move, while the US has previously used steep tariffs to block Chinese EV imports.

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Reference:

• Reuters, Tesla poised to be early winner as Canada opens door to Chinese-made EVs. Diakses pada 20 Januari 2026

• Featured Image: Shutterstock