Canada is currently facing a dilemma when it comes to its electric vehicle market. The country has a 100% tariff on electric cars imported from China, making it financially unfeasible for Chinese EV manufacturers to sell their vehicles in Canada. However, recent developments suggest that this could soon change.
According to reports from CTV News, the Canadian government is considering lowering or completely eliminating the 100% tariff on Chinese electric vehicles. This potential move comes as a response to China imposing retaliatory tariffs on Canadian agricultural exports, such as canola meal, canola oil, and peas. These tariffs have had a significant impact on Canada’s agricultural sector, prompting the government to explore ways to support its farmers.
By easing or removing the tariff on Chinese EVs, Canada could not only benefit its agricultural industry but also give a much-needed boost to its struggling electric vehicle market. Recent data shows that EV sales in Canada have seen a sharp decline, with a 39.2% year-over-year decrease in the second quarter of 2025. Factors such as the elimination of financial incentives for EVs in certain provinces have contributed to this decline.
Moreover, the lack of affordable electric vehicle options in Canada has also hindered the growth of the EV market. The federal rebate for EVs excludes high-priced models like Teslas, leaving few options for consumers looking for more budget-friendly electric vehicles. By allowing tariff-free Chinese electric cars into the market, Canada could potentially attract more buyers to electric vehicles and accelerate the country’s transition to electrification.
While the decision to lower or eliminate the tariff on Chinese EVs is still under discussion, it presents an opportunity for Canada to address multiple challenges simultaneously. By supporting its farmers and revitalizing its electric vehicle market, Canada could take a significant step towards a more sustainable and prosperous future.