The Pros and Cons of Chinese EVs in Canada

Whether it's been negotiating around plant closures, product availability and distribution, higher prices, or unpredictable tariff rates, Canada and China have borne the brunt of the United States' unpredictable automobile trade policies. To add some stability to the ongoing situation, the two countries agreed on a new trade deal to bring Chinese-made electric vehicles (EVs) back to Canada in greater numbers and at lower prices.

Part of a broader agreement that will also see China reduce tariffs on imported Canadian agriculture and seafood products, the previous 100 per cent tariff on Chinese-made EVs will drop to the "most-favoured-nation" tariff rate of 6.1 per cent. The number of vehicles will be capped at 49,000 annually. 

At a time when rising prices remain a concern for car shoppers, the promise of cheaper EVs is a positive. The upshot is that around half of them will be priced below $35,000 CAD, offering consumers a more affordable path into a new EV, a welcome relief when the lowest prices for new electric cars hover around $50,000 CAD. 

Here are some pros and cons of cheaper Chinese EVs returning to the Canadian market.

PRO: More Affordable EVs for Canadian Car Buyers

If you're a canola farmer or a lobster fisherman, you should be happy with the new tariff deal. But potentially, the happiest group of Canadians will be those shopping for an affordable EV.

AutoTrader surveys consistently show that the premium prices of battery-only models are the biggest barrier to purchase, pushing shoppers toward more affordable options like hybrids or lower-priced gas cars. 

While interest in EVs is growing, the number of consumers actually putting their paychecks toward buying an electric car has decreased.

CON: New Competition for American EV Makers

Whether you're selling cars or crab, there's always competition from somewhere in the world, which is why this new Chinese-Canadian trade deal isn't good news for American automakers trying to sell their EVs to Canadians.

Higher manufacturing costs have made it challenging for some American automakers to transition to competitively priced but profitable EVs. In the U.S., Ford reportedly loses $100,000 USD on every Mach-E, F-150 Lightning, and E-Transit EV. 

That's not the case in China. 

The country's dominance in battery mineral mining and refining, and its commitment to EV development through generous government subsidies, allow Chinese EVs to be sold more cheaply worldwide. In the last quarter of 2023, China's BYD dethroned Tesla as the leading manufacturer of EVs in the world.

Even future “affordable” American-made EVs may be too expensive for our wallets. 

Ford's forthcoming new Universal EV Platform is expected to go on sale in 2027. The first planned product is a small pickup truck expected to have a starting price of $30,000 USD ($42,000 CAD), or about $7,000 CAD more expensive than the Chinese imports that will be coming into Canada at the same time. General Motors is relaunching its most affordable EV, the Chevrolet Bolt. But its starting price of $39,999 CAD is also more expensive than the projected Chinese models. 

If Canadians aren't willing to pay the price difference for an American-made Ford or Chevrolet EV, how long will they continue to be sold in Canada?

PRO: Less Financial Burden on Canadian Taxpayers

In the past, Canadian federal and provincial governments offered EV purchase incentives aimed to make EVs more affordable and accessible. By all accounts, the federal government's  Zero-Emission Vehicles (iZEV) Program met its goal. 

Since its introduction in 2019, over 546,000 vehicles have been incentivized through this program. It reached a record high of 16.5 per cent ZEV market share in the third quarter of 2024. But since the program was paused in March 2025, the resulting increase in electric car prices has led to a drop in interest and sales. 

Critics of the program cited that these incentives were being funded by Canadian taxpayers, even those who didn't support the program. The forthcoming, cheaper Chinese EVs should offer lower prices than the government program created, without using Canadian taxpayer money.

CON: Potential Loss of Jobs for Canadian Auto Union Workers

Canadian auto union leaders have expressed concerns that allowing an influx of low-cost Chinese EVs will jeopardize and potentially reduce Canadian automotive union jobs. 

Unifor, representing 320,000 workers, has slammed the removal of the 100 per cent tariff on Chinese EVs, calling it a "self-inflicted wound" that threatens to turn Canada into a "dumping ground" for heavily subsidized, low-cost imports. 

This comes at a time when three of the five American automaker plants in Canada are inactive, with only GM's Oshawa plant and Stellantis' Windsor plant building the Chevrolet Silverado pickup truck and Chrysler Pacifica minivan, respectively.

Contrary to those concerns, however, partnering with Chinese EV makers to build their vehicles in Canada, as they do in Europe, could create more jobs and manufacturing opportunities while giving Canadian buyers more affordable EVs.

"It is expected that within three years, this agreement will drive considerable new Chinese joint-venture investment in Canada with trusted partners to protect and create new auto manufacturing careers for Canadian workers, and ensure a robust build-out of Canada's EV supply chain," a statement released by Canadian Prime Minister Mark Carney.

PRO: More EVs for Canadian Dealers to Sell

The reduction of tariffs on Chinese-made EVs is no more than a turning back of the clock. 

Canada raised EV tariffs on China to 100 per cent in 2024, aligning with the American policy. Before then, a host of Chinese-built EVs were sold in Canada from existing brands, like the Tesla Model 3 and Model Y, the Polestar 2, and the Volvo C40 and XC40 Recharge models. 

This reversion to the previous tariff policy should allow these Chinese models to return to Canadian showrooms.

Final Thoughts

Dealing with the realities of a swiftly moving global trade climate, the potential return of Chinese EVs into the Canadian market could usher in a new era of EV affordability. 

Partnering with Chinese EV makers to build their vehicles in Canada, as they do in Europe, could also create more jobs and manufacturing opportunities while giving Canadian buyers more affordable EVs.

On the other hand, if no one can afford to buy an EV, regardless of where it is made, potential tariffs or trade measures may not protect Canada's growing EV industry.