Carmakers preparing to enter Canadian market

Canada began issuing import permits on March 1 for a limited number of electric vehicles imported from China at the standard 6.1 percent tariff rate, reopening market access after scrapping the 100 percent surtax imposed in 2024.

According to notices issued by the Canadian government, up to 49,000 electric vehicles imported from China will be eligible for the standard tariff rate under the first-year quota ending Feb 28, 2027. For the first six months, from March 1 to Aug 31, Canada will issue permits on a first-come, first-served basis for 24,500 vehicles.

Some Chinese carmakers are preparing to enter the Canadian market. According to National Business Daily, BYD has moved ahead with compliance-related work for potential exports, while Chery has posted jobs related to vehicle engineering, certification and driver-assistance systems for Canada and the broader North American market.

A second six-month period starting Sept 1 will cover another 24,500 vehicles, plus any unused volume from the first phase. Canada has also said the quota could rise to 70,000 vehicles within five years.

The policy marks a shift from Ottawa's earlier tariff stance. Canada imposed a 100 percent surtax on electric vehicles imported from China effective Oct 1, 2024, on top of a 6.1 percent most-favored-nation tariff. Under the new arrangement, the additional surtax has been removed, but covered imports still require shipment-specific permits and must comply with all applicable Canadian safety and regulatory requirements.

Before the surtax took effect, China's electric vehicle exports to Canada had been growing rapidly. Cui Dongshu, secretary-general of the China Passenger Car Association, said China exported 41,700 new energy passenger vehicles to Canada in 2023, up 751 percent year-on-year, while exports reached 13,200 units in the first half of 2024, up 500 percent.

Sun Xiaohong, secretary-general of the automotive branch of the China Chamber of Commerce for Import and Export of Machinery and Electronic Products, said the policy change sends a positive signal for bilateral cooperation.

He said Chinese electric vehicles are competitive in the Canadian market in terms of price and performance, and that the removal of the additional tariff could help restore the trade that was disrupted in 2024.

Cui said the move is broadly in line with the strengths of Chinese brands in affordable electric vehicles. He added that carmakers seeking a long-term presence in Canada will still need to establish local sales and after-sales service networks.

Sun also said China-Canada cooperation in the auto sector could eventually move beyond vehicle export from China to local production if policy conditions remain stable and predictable.

wangyuchen@chinadaily.com.cn