BEIJING / SHANGHAI — Tesla is expected to be among the first automakers to gain from Canada’s decision to partially reopen its market to electric vehicles manufactured in China, analysts say, citing the company’s prior export experience, established Canadian operations, and flexible global production strategy.
Canada announced last week that it will permit a limited number of China-built electric vehicles to enter the country under reduced tariffs, reversing a policy introduced in 2024 that imposed a 100 per cent duty. Under the new framework, up to 49,000 vehicles per year will be allowed at a tariff rate of 6.1 per cent, with the quota expected to expand over time.
Industry experts say Tesla is uniquely positioned to take advantage of the shift because it previously exported vehicles to Canada from its Shanghai factory — its largest and most cost-efficient production hub — before the tariffs were imposed.
In 2023, Tesla began shipping a Canada-specific version of its Model Y from Shanghai, contributing to a sharp increase in vehicle imports from China through the Port of Vancouver. Those exports were halted the following year when Ottawa introduced steep tariffs aimed at countering what it described as China’s state-driven industrial overcapacity.
Since then, Tesla has supplied the Canadian market primarily from its U.S. and European plants. However, several lower-cost models and variants are manufactured mainly in China, making the policy change particularly significant.
“This agreement creates a pathway for Tesla to resume exports relatively quickly,” said Sam Fiorani, vice-president at automotive research firm AutoForecast Solutions. “They already have the logistics, certifications, and market presence in place.”
While half of the import quota is reserved for vehicles priced under $35,000 — a threshold Tesla’s current lineup exceeds — analysts say the company still holds advantages over Chinese competitors that lack a retail footprint in Canada.
Tesla operates dozens of stores and service centres nationwide and maintains a streamlined product lineup, allowing it to adjust sourcing more rapidly than automakers with broader model ranges, said Yale Zhang, managing director at AutoForesight in Shanghai.
Chinese automakers may still benefit
Despite Tesla’s head start, analysts note the policy could open the door for Chinese brands seeking to enter or test the Canadian market, particularly in the lower-priced EV segment.
“The biggest long-term opportunity is for Chinese manufacturers and Canadian consumers looking for more affordable electric vehicles,” Fiorani said.
Canada has signalled interest in exploring partnerships and joint ventures with Chinese firms to develop domestic EV manufacturing capabilities over the coming years, according to public broadcaster reports. Some Chinese automakers already have limited operations in Canada, including electric bus assembly facilities.
The policy shift has drawn criticism from U.S. officials, who maintain a hardline stance against Chinese-made EV imports. Washington’s tariffs effectively block such vehicles from entering the American market.
Canadian officials have said the new framework balances trade diversification, consumer affordability, and industrial strategy, though its long-term impact on North American auto manufacturing remains a subject of debate.
