China’s new energy vehicle makers are accelerating their move into Canada as the two countries’ new trade arrangement opens the door to greater market access, with leading automakers already moving to establish local sales networks and prepare product launches.
The latest sign of that momentum came as China’s Ambassador to Canada Wang Di announced that Lotus, the premium electric vehicle brand under Geely Auto Group, will begin sales in Canada next month. The launch will mark the first Chinese-owned and manufactured EVs to enter the Canadian market under a new bilateral arrangement that allows up to 49,000 Chinese EVs to be imported each year at a preferential tariff rate of around 6 percent.
The agreement, which took effect on March 1, replaced the previous 100 percent tariff imposed in 2024. The annual quota will expand by 6.5 percent each year, reaching about 67,000 vehicles by 2031, providing Chinese automakers with gradually increasing access to the Canadian market.
Besides Lotus, more Chinese automakers are lining up to enter Canada. During her visit to China this month, Canadian Industry Minister Melanie Joly said she met with executives from four Chinese automakers — BYD, Chery, Geely and Shanghai Launch Automotive Technology — all of which expressed interest in exploring joint ventures in Canada as a pathway to local production.
The interest has already translated into concrete preparations, with several leading Chinese automakers having accelerated their market entry plans.
According to domestic media reports, BYD plans to open six retail outlets while completing import compliance procedures for two passenger vehicle models. Geely’s premium Lotus is also preparing six dealerships, while ChangAn Automobile has established a dedicated local team to advance vehicle certification and build its local sales network.
Although Chinese-made EVs have been entering Canada under the new framework since May, import quotas have been dominated by Tesla vehicles manufactured at its Shanghai Gigafactory in this early window, with an estimated share of 10 percent to date, according to foreign media reports.
However, He Weiwen, a senior fellow at the Chinese Association of International Trade, said the tariff quota arrangement is still “a pragmatic breakthrough”.
“An annual quota of 49,000 vehicles accounts for only about 2.5 percent of Canada’s new vehicle sales last year, but it provides Chinese automakers with an important foothold in the market. In addition, Canada’s renewed interest in automotive cooperation with China reflects its broader strategy to diversify trade partnerships,” He said.
“Canada has long relied heavily on the United States market, and the risks of excessive dependence on a single trading partner have become increasingly apparent,” he said, adding that the Canadian government has already proposed doubling exports to markets outside the US over the next decade. “Cooperation with China’s auto industry is thus one important piece of that broader diversification strategy.”
Still, He cautioned against overstating the broader implications of Canada’s policy shift.
“For Chinese automakers, the key question is not how many countries are opening their doors. The real challenge is to become an indispensable long-term partner in those markets through technology, products and localized operations,” He said.
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