Canada reviews limits for Chinese EV import permits

Canada is debating whether to split its new quota for Chinese-made electric vehicles among automakers.

Prime Minister Mark Carney agreed in January to allow up to 49,000 such imports annually at a 6.1% tariff, opening the market to BYD, Chery, and Tesla.

The quota took effect in March, with 24,500 permits available until August 31 on a first-come first-served basis.

The government is weighing company-specific caps after August 31, and none of the permits had been used as of this week.

Tesla recently advertised a Model 3 in Canada for C$42,132 after delivery fees, a sharp cut from its earlier list price.

Ottawa wants broad access to the permits and plans to reserve half the quota for vehicles priced below C$35,000 within five years.

🔗 Source: Bloomberg

🧠 Food for thought

Implications, context, and why it matters.

Tesla cuts Canadian prices after tariff changes on Chinese EVs and separate duties on US-made cars

Canada now charges a 6.1% most-favored-nation tariff on Chinese-origin EVs that enter within a 49,000-vehicle yearly quota. That replaces the earlier effective 106.1% duty, which had nearly stopped those imports 1.
Tesla faced another hit when Canada added 25% counter-tariffs on US-made vehicles in early 2025. That lifted the Model 3 Long Range All-Wheel Drive (AWD) to C$79,990 2.
Tesla then moved supply for the new Model 3 Premium Rear-Wheel Drive (RWD) from Fremont, California, to its Shanghai factory 2.
The car now starts at C$39,490, the lowest price yet for the sedan in Canada. It does not qualify for the C$5,000 Electric Vehicle Affordability Program (EVAP) rebate because it is built in China, which is not a free-trade partner 2.

Canada ties the EV quota to a wider trade deal with China that also covers farm exports and investment

The EV rule sits inside a broader arrangement in which China is expected to ease some trade barriers and tariffs on Canadian rapeseed plus certain seafood products 1.
Canadian officials also say the deal aims to bring more Chinese joint-venture investment into Canada with trusted partners, including projects linked to the EV supply chain 1.
US tariffs keep these cars out of the American market. Tesla’s move could still push US automakers to build lower-priced EVs for markets where Chinese models are sold 3.
Tesla already has a head start in Canada through its charging and service network. The quota could also let in rivals such as BYD, a Chinese EV maker that plans 20 Canadian dealerships within a year 2.