Tesla (TSLA) will likely be one of the first automakers to benefit from Canada’s move to slash tariffs on Chinese-made electric vehicles, Reuters reported.
Canada will allow 49,000 EVs to be imported from China annually with a 6.1% tariff, down from the 100% rate that was in place since 2024, in exchange for tariff concessions on canola and other Canadian goods. The EV quota could rise to 70,000 within five years.
While Chinese EV makers don’t have a significant sales presence in Canada, Tesla (TSLA) has an existing network of 39 stores in the country.
Tesla’s (TSLA) biggest plant is in Shanghai, which is already equipped to build and export a Canada-specific version of its Model Y, according to the report.
It started shipping this version to Canada in 2023 but was forced to stop in 2024 after Ottawa imposed 100% tariffs on Chinese-made EVs. It currently ships Model Ys produced in Berlin to Canada.
To note, half of Canada’s EV quota under the trade deal will be reserved for vehicles priced under C$35,000 ($25,192). Tesla (TSLA) model prices are above that number.
Low-cost cars from China’s BYD (BYDDF) could benefit from that quota, but the company currently has negligible sales in Canada.
Other automakers that exported Chinese-made cars to Canada before the imposition of 100% tariffs include Volvo (VLVLY) and Polestar (PSNY), which are both owned by Chinese conglomerate Geely (GELYF).