Canada’s tariff relief could give Tesla an early edge in China-made EVs

Canada will lift the 100% tariffs on Chinese-made EVs and set a quota of up to 49,000 vehicles annually at a 6.1% MFN tariff (potentially rising to 70,000 within five years). Half the quota is reserved for cars under 35,000 CAD, which could limit some Tesla models, but Tesla already has a Canada-focused Model Y from its Shanghai plant and a 39-store network, giving it an early advantage as other Chinese brands eye the market. In 2023, Shanghai-made exports boosted Canada-bound Chinese car imports via Vancouver, but exports paused in 2024 under Ottawa’s tariffs and shifted to the US and Berlin plants; the new deal could resume Chinese shipments more quickly. The move also opens opportunities for Chinese automakers to test Canada’s market, with Canada signaling potential joint ventures to build EVs using Chinese know-how; BYD already has an Ontario bus plant.