Eighteen Lotus Eletre SUVs are due to clear customs in Montreal this month, becoming Canada's first Chinese-owned and Chinese-built EVs sold under Ottawa's new China trade deal, and the first Chinese-built EVs of any kind to arrive since the 100% tariff took hold in October 2024. Their arrival caps a six-year swing from open market access to near-total exclusion and back to a tightly rationed reopening.

China-built EVs were not new to Canadian roads. Geely (HKG: 0175)-owned Polestar (NASDAQ: PSNY) began selling its China-assembled Polestar 2, built at Geely's plant in Taizhou, in July 2020, three years before Tesla (NASDAQ: TSLA) started shipping Shanghai-built Model 3 and Model Y units to Canada in the first half of 2023, a move that pushed Chinese auto imports up 460% that year. Both ran under the same standard 6.1% duty that still applies to most imports; Polestar is marketed as a Swedish brand, which is why press coverage credits Chinese-branded Lotus, not Polestar, as the "first" arrival under the new deal.

That changed on October 1, 2024, when Canada's 100% surtax on Chinese-made EVs took effect, stacking on top of the existing 6.1% rate. Prime Minister Justin Trudeau said Ottawa was countering what he called China's "intentional, state-directed policy of overcapacity," a rationale that echoed the 100% tariff the United States had imposed months earlier. Polestar suspended its Canadian imports entirely by March 2025, and BYD (HKG: 1211), which had targeted a 2024 entry, shelved those plans once the levy took hold.

Beijing called the move a violation of WTO rules and, by March 2025, imposed retaliatory duties of up to 100% on Canadian canola oil and peas and 25% on pork and aquatic products. It escalated that August with a preliminary 75.8% anti-dumping tariff on Canadian canola seed, a crop worth roughly $4 billion a year in exports to China.

The standoff broke on January 16, 2026, when Prime Minister Mark Carney met President Xi Jinping in Beijing and agreed to admit up to 49,000 Chinese-built EVs in the first year at the standard 6.1% tariff — a volume Ottawa said matched pre-tariff import levels from 2023 and 2024. In exchange, China agreed to cut its canola seed duty to roughly 15%.

The quota took legal effect March 1, 2026, growing 6.5% annually, with the share reserved for EVs priced at $35,000 or less rising from 10% in year two to 50% by year five. Global Affairs Canada began issuing shipment-specific import permits on a first-come, first-served basis, and China's commerce ministry formally adjusted its retaliatory measures the same month.

Tesla moved fastest, launching a Shanghai-built Model 3 Premium in Canada on May 1, 2026 at C$39,490 (c. $27,900) — 463 km (288 miles) of range for roughly half the price of the previous cheapest Model 3 — and is estimated to have absorbed 7,000 to 10,000 of the first 24,500 permits. BYD, Chery (HKEX: 9973), and Geely spent months hiring staff, filing trademarks, and running cold-weather road tests in Canada before selling a single car.

According to Yiche, BYD executive vice-president Stella Li said on social media in June that the company would open more than 20 dealerships across Toronto, Vancouver, Montreal, and Calgary by the end of 2026, with the Atto 3, Seal, Dolphin, and Seagull priced from C$25,000 (c. $17,600) — a claim not yet confirmed in an official company release. Geely-owned Lotus (NASDAQ: LOT) got there first: it cut the Eletre's price to C$119,900 (c. $84,600) from C$313,500 (c. $221,300) and shipped the brand's first 18 units in May, with a delivery ceremony planned in Montreal this month.

China's ambassador to Canada, Wang Di, has said he hopes "genuine" Chinese-brand EVs will clear Canadian procedures by autumn. Whether a 49,000-unit annual quota holds once BYD, Chery, and Geely are all shipping alongside Tesla is a question the next dealership opening will start to answer.

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