- Permits will be granted on a first-come basis.
- Tesla, Volvo, and Polestar should benefit first.
- First 24,500 permits run from March to August.
Canada is preparing to reopen its doors, at least partially, to Chinese-built electric vehicles. In the coming months, it will begin issuing permits at a sharply reduced tariff rate. However, locals should not expect the market to be immediately flooded with new and innovative EVs, as has happened in parts of Europe and Australia.
Under Canada’s new trade agreement with China, up to 49,000 EVs built in China can be imported at the reduced 6.1 percent tariff, down from the 106.1 percent rate imposed in 2024.
Read: After Letting China In, Canada Hopes Korea Comes Too
Global Affairs Canada said in an import-control notice published on February 26 that, from March 1 through August 31, the first 24,500 permits will be handed out on a simple first-come, first-served basis.
Given that it has only been six weeks since the reduced tariff was announced, automakers looking to enter the Canadian market for the first time are unlikely to secure a significant share of these initial permits.
Which Companies Stand To Gain Most?
Instead, established firms are expected to benefit first. Volvo and Polestar, for example, had been exporting EVs from China to Canada prior to the 2024 tariff hike and likely retain the production flexibility to resume shipments for the Canadian market. Tesla also built China-made EVs for Canada before the tariffs took effect and is considered a frontrunner for the early permits.
Speaking to Auto News, Global Affairs spokesperson Samantha Lafleur said there is no predetermined limit on the number of permits each automaker may receive, although temporary limits could be introduced during the initial six months. Lafleur added that the department “will monitor the application and issuance of import permits for the purpose of providing equitable access to the quota to eligible applicants.”
Second Phase Of The Import Quota
The second quota of 24,500 permits will open on September 1, 2026, and run through February 28, 2027. Any permits unused during the first six months will be added to this second allocation period.
Canadians waiting for the most competitive offerings from China will be watching closely for the potential arrival of BYD and Geely, the country’s two largest automakers. As reported by Auto News, BYD has acknowledged it is evaluating sales in Canada. Geely, meanwhile, could expand its footprint beyond Volvo and Polestar by introducing additional brands such as its namesake marque and Zeekr, among others.
