TORONTO — Rachel Doran, executive director of Clean Energy Canada, made the following statement in response to the federal government’s deal to allow the annual sale of 49,000 Chinese EVs in Canada annually at a low tariff rate, rising to 70,000 in half a decade.
“Over the past year, Clean Energy Canada has been clear that Canada inadvertently ‘broke’ its EV market with a combination of policy changes under the past two governments: ending the EV incentive, pausing the EV Availability Standard, and imposing a 100% tariff on Chinese EVs in late 2024.
“The end result has been fewer affordable options for consumers and lower EV adoption rates impacting our climate goals—leaving Canada in the embarrassing position of being potentially the only country in the world last year with declining EV sales. This morning, Canada appears to have found a solution that works for both it and China, allowing the sale of a limited number of Chinese EVs into Canada at a lower tariff rate—and in one fell swoop, creating the affordable EV segment Canada has so desperately needed.
Not only will this answer the problem of affordability very directly, with more affordable Chinese EVs for sale, but it sends a strong market signal to other automakers: the Canadian market is now competitive, so price your cars accordingly. And to be clear, this is a strong market signal more than a flooding of the market, equivalent to about 3% of Canada’s total annual market for new vehicles. That’s considerably less than half the sales of Canada’s best-selling vehicle, Ford’s F-series truck.
Canada’s approach to tariffs on Chinese EVs has never needed to be so binary. While we have simply followed the sledgehammer approach of the U.S. to date, the option has always been open to implement a more flexible lower tariff like our other allies did in the EU.
“Traditional U.S. automakers have already experienced significant market share decline over the past two decades, well before Chinese EVs took off around the world, and walling out the competition entirely while rolling back EV plans to appease Trump will only end in tragedy. One in four new passenger vehicles sold globally in 2025 was electric. U.S. automakers must ultimately save themselves if they are to compete in a changing global landscape.
“Canada must look out for Canada first and foremost. That includes both the affordability needs of consumers as well as the future of our own auto industry. U.S. vehicle manufacturing is only a relatively small part of that (Canada builds more Japanese vehicles). Canada is a leader in producing auto parts and poised to be a global leader of sustainable critical minerals and, ideally, the processing and refining of those minerals in order to capture even more value here at home. This enormous opportunity for Canada goes hand in hand with higher EV uptake.
“And while we are not privy to the details of Ottawa’s conversations with Beijing, we are encouraged to hear the federal government feels ‘this agreement will drive considerable Chinese investment into Canada’s auto-sector, create good careers in Canada, and accelerate our progress towards a net zero future.’ As many of today’s supply chains run through China, Canada needs to be strategic. Attracting Chinese EV and battery manufacturing investment can benefit Canada in other ways, employing Canadian workers, using upstream Canadian inputs like critical minerals, and engaging in technology and skills transfer to help Canadian companies catch up to China’s lead.
“Of particular interest to us is the detail that part of this quota will be reserved for EVs with an import price of $35,000 or less, with this portion increasing to 50% of imported Chinese EVs by 2030. Last year, Clean Energy Canada highlighted the fact that Canada had only a single, not-very-competitive EV under $40,000—compared to 21 such vehicles sold in Europe. This approach will allow Chinese vehicles into Canada to compete in a very specific market segment, one that is underserved in Canada today.
“To that end, today’s decision can be bolstered further by allowing vehicles that have passed European safety standards to be sold in Canada. Of those 21 EVs mentioned above, only seven were Chinese, and Canadians would surely enjoy driving affordable European EVs too. This would also expand the affordable EV market beyond the limits of the 50,000 quota by allowing in more competitively priced EU EV models, which will be necessary as EVs inevitably grow in popularity in the years to come.
“This decision will also help lay the foundation to maintain a strong EV Availability Standard in Canada, which will also help drive forward the entire EV market across Canada, drawing in lower-priced models from other manufacturers and ensuring predictability to build out Canada’s charging networks and electricity grid to help fix, once and for all, our broken EV market.
“We congratulate the federal government on the deal struck today and look forward to seeing more Canadians get behind the wheel of an EV they can afford —and that will ultimately save them thousands of dollars on gas. Canadians deserve a break, and they just got one.”
RESOURCES
Op-ed | “Canada broke its electric vehicle market in 2025 and it did so alone”
Op-ed | “Chinese EVs won’t break Canada’s car market — but they could improve it”
Report | Missing Out