Chinese EVs coming to Canada in 2026.

Canada has just reversed its position on Chinese-built EVs. While it had imposed a 100% tarriff in 2024, the country now has a new trade deal with China. Which includes a reduction of the tariff all the way down to 6.1% (While China drops tariffs on Canadian products).

It will also allow up to 49,000 Chinese-built EVs a year to be sold in Canada for 5 years. Then up to 70,000 a year. That’s only for cars coming from China. I am sure that if Chinese manufacturers see a growing market in Canada, cars could quickly be built locally. Just like in Europe.

49,000 a year isn’t much, of course. But these are EVs. About 270,000 EVs were sold in Canada in 2024. And 49,000 units is quite a large percentage of that market. Chinese manufacturers could easily and very quickly be ahead of Tesla in Canada. Where the US EV manufacturers sold about 48,000 cars in 2024. (Less in 2025)

Of course, no one knows what Chinese cars will be sold in Canada. But the new trade deals mentions 50% of these cars would be priced under $35,000. (Which is about $25,000 US!). That means instant, affordable EVs.

This is a big deal. One that will put even more pressure on US manufacturers to come up with more affordable EVs. Even with a dip late last year due to the lack of federal incentives after September, sales of EVs in the US were above 1.3 million units, with almost 8% of market share.

Even with only 49,000 units allowed in Canada, Chinese car makers could instantly become major players.

It will be very interesting to see which ones will come over, and who will decide to build locally. Which will happen. “This agreement will drive considerable Chinese investment in Canada’s auto sector, creating good careers in Canada and accelerating our progress toward a net-zero (emissions) future and the auto industry of the future.” says the Canadian prime minister.

Geely mentioned only a few days ago at CES that they were interested in entering the US market within 2 or 3 years. Which is pretty valuable and something we’ve heard from various Chinese companies for many years. With today’s Canadian announcement, the Gelly comment becomes more serious. The company could enter the Canadian market very quickly.

Geely has already mentioned the Lynk & Co and Zeekr brands as possibilities. My vote would go to the Xiaomi sedan and SUV. Which look pretty fantastic and have been getting amazing reviews from many around the world. Even from Ford’s Jim Farley himself, who said last year he doesn’t want o to give up his Xiaomi sedan after driving it for a few months.

This will be interesting…