Canada Opens Door to Chinese EVs, Tariffs Slashed to 6%; Tesla's Shanghai-Made Models Lead Entry (TSLA)

Canada’s low-tariff quota for Chinese-made electric vehicles took effect in March 2026, slashing duties to 6.1% from 106.1% for up to 49,000 vehicles a year. Tesla Inc. (TSLA) is the first major beneficiary, with Shanghai-built Model 3s and some Lotus models already arriving at Vancouver port under the agreement struck between Prime Minister Mark Carney and Chinese President Xi Jinping in January. As of May 29, 2,910 vehicles—about 11.9% of the first-half quota of 24,500—have been claimed, dominated by Tesla’s Model 3. The quota could rise to 70,000 annually over five years. Chinese automakers BYD, Chery, and Geely are actively scouting dealerships and registering trademarks, while Nissan is evaluating exports of China-made EVs to Canada. The policy has drawn sharp protest from U.S. auto executives including GM CEO Mary Barra, who fear Chinese brands will use Canada to erode North American market share. Bipartisan legislation introduced in the U.S. Congress this week aims to ban Chinese-connected vehicles from entering America via Canada and Mexico, citing data-security risks.