It’s now confirmed: the Government of Canada will follow in the footsteps of our American neighbors and impose a 100% tax on the import of Chinese electric vehicles. This tariff increase will apply to all electric vehicles manufactured in China after October ^1st, 2024.

In practical terms, this will prevent companies like BYD, which has become the world leader in electric car sales, from selling their cars in Canada. The decision also applies to plug-in hybrids.

Minister Freeland’s announcement is designed to protect Canadian automotive companies from the invasion of Chinese vehicles, whose manufacturers are allegedly heavily subsidized by their own government. The federal government is afraid of unfair competition and non-compliant practices.

More than BYD

However, the government’s decision will have an impact on other manufacturers. This is true of Tesla, for example, whose models for the Canadian market are assembled in China. However, this is not the case for those sold on the American market. The company will therefore have to shift production to avoid the tax.

The same applies to Polestar, whose assembly line will also have to be relocated.

Interestingly, gasoline-powered vehicles are exempt from the new tariff, enabling Buick in particular to continue assembling its Buick Envision models in China.

Tariffs will not be the only constraint on the arrival of Chinese vehicles. In addition to increased import costs, Chinese-made electrified vehicles will no longer be eligible for subsidies, as access to various federal government programs will be limited to products manufactured in countries that have negotiated free trade agreements with Canada. All these standards come into force this fall in Canada. The United States and the European Union have also adopted similar measures.