by The Canadian government has signed a new trade agreement with China and significantly reduced tariffs on Chinese electric vehicles. This decision is already beginning to yield results. It is expected that by the end of this year, three major Chinese automakers may begin selling their cars in the Canadian market.
Preparing for Market Entry
It is known that the companies BYD, Chery, and Geely have already begun the process of certifying their vehicles for sale in Canada. In parallel, they are exploring opportunities to establish dealer networks and financial partnerships across the country, which clearly indicates that Canada is being considered as an important direction for expansion.
Representatives of Chery confirmed that the company is “evaluating a number of potential pathways for future development, including partnerships with local stakeholders.” They added that “the priority is to ensure a thoughtful approach to any potential entry, with a strong emphasis on long-term sustainability, product competitiveness, and customer experience.”
The Canadian government has stated its readiness to assist Chinese brands with “timely vehicle certification.” However, even with such support, companies may need over a year to overcome all regulatory hurdles.
Who Will Benefit First?
Given this, it is unlikely that these brands will be the ones to take advantage of the first quota with reduced tariffs of 6.1%, which is in effect from March 1 until the end of August and is limited to only 24,500 permits. Permits will be distributed on a first-come, first-served basis, and they are expected to be quickly taken by Tesla, Volvo, and Polestar.
According to reports, BYD and Geely are likely a step ahead of Chery. BYD had planned to enter the Canadian market in the summer of 2024 but paused these plans due to the introduction of high new tariffs. Geely already has a presence in Canada through the Volvo and Polestar brands. The first full-fledged own Geely brand to launch in Canada could be Zeekr, whose trademark was registered locally last year.
Dealer Agreements
The companies are not expected to sell cars directly to consumers. Most likely, they will opt for the traditional model of partnering with dealer networks. According to Jason Zhao, Director of Asian Market Development at DSMA, all three companies are already in negotiations with dealer groups.
Several other Chinese brands are expected to enter the Canadian market in the coming years. Zhao believes that in the near future, 15 to 20 automakers could enter the market.
This potential influx of new manufacturers could significantly reshape the Canadian automotive market, making it more competitive, especially in the electric vehicle and affordable model segments. For Canadian consumers, this could mean greater choice and potentially more attractive prices. The success of these brands will largely depend on their ability to adapt to local conditions, climate, and buyer expectations, as well as on building a reliable service and support network.
