Chinese electric carmakers see path to North American takeover with Canada trade deal

Chinese electric carmakers are finally getting a shot at North America. After years of being blocked, China’s top EV brands like BYD and Geely are starting to see real changes in how Western markets treat them.

Tariffs are easing. Quotas are being set. The door is cracked, and they’re stepping in.

This is the year things might start shifting. Nobody expects a massive export boom overnight, but China’s EV giants are now positioned to test the waters in countries they’ve barely touched before.

They’ve already crushed the competition in places like Southeast Asia and Russia. Now they’re setting their sights on the U.S. and Canada.

Canada drops 100% penalty and opens small quota

Prime Minister Mark Carney just confirmed that Canada will drop the extra 100% tariff it placed on China-made EVs last year. That tariff had completely stopped imports. Now, the country is allowing up to 49,000 units per year, starting immediately. Carney made the announcement after his visit to Beijing.

He’s not removing all taxes. A 6.1% tariff is staying in place, mostly for longer-range models loaded with software and flashy entertainment systems. But this change is a clear shift from Canada’s previous hardline stance.

This happened right after Beijing and the European Union agreed to get rid of steep tariffs, anywhere between 7.8% and 35.3%, and replace them with pricing deals that let Chinese carmakers earn more per sale.

Geely said the news out of Canada gives them and others like them a new opening. “At first glance it is a positive step in the right direction. We are following it closely but it is too early to comment on specifics,” the company said.

Sales surge in Europe while Canada restarts from zero

Right now, China is the biggest electric vehicle producer in the world. They shipped 2.6 million cars last year, including hybrids. That was a 104% increase, based on numbers from the China Association of Automobile Manufacturers.

Even with those numbers, China’s EVs haven’t had much luck breaking into places like the U.S. or the EU, not because of the cars themselves, but because of policy. Canada’s 2024 decision to slap a 100% tariff wiped out their EV imports entirely.

Phate Zhang, who runs CnEVPost in Shanghai, said this new import cap might help turn things around. “A sales cap below 50,000 units is not enough to shore up a Chinese EV maker’s total export volume, but it will definitely be a good start if [they] can convince local drivers of their reliability,” he said. “Canada, as part of the big North American market, is of great significance to Chinese companies.”

BYD, China’s largest EV builder, is doing a lot better in Europe. They delivered 159,869 cars there in the first 11 months of 2025, which is 276% more than they shipped in the same period the year before. That’s based on numbers from the European Automobile Manufacturers’ Association.

Still, they aren’t getting a free pass. BYD cars sold in Europe face a 17% anti-subsidy charge on top of a 10% regular tariff. That cuts into profits.

In Canada, now that the 100% penalty is gone, they’re likely to earn a lot more per sale. Right now, international shipments make up 20% of BYD’s total sales.

Back home, China’s EV scene is massive. Local drivers bought 70% of the electric cars sold globally last year. That’s around 13 million units, according to the China Passenger Car Association.

Xu Bin from UBS Securities pointed out how prices are rising fast. “Most of China’s exported cars are priced at about 100,000 yuan (US$14,355) and we now see cars priced at 300,000 yuan sold abroad,” he said.

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