The reduction in tariffs on Chinese car imports to Canada is expected to significantly decrease costs, potentially driving an increase in electric vehicle (EV) sales. However, experts suggest that while Canada’s charging network and power grid are capable of accommodating the demand, there are some existing gaps and challenges that need attention as the EV fleet expands.
Under the new agreement, China will be able to export up to 49,000 EVs annually to Canada at a reduced tariff rate of 6.1%. This adjustment is anticipated to make a greater number of Chinese EVs accessible to Canadian consumers at more competitive prices.
This quota represents a modest portion of the total auto sales in Canada, amounting to approximately 3%. The figure aligns with the number of Chinese EVs sold in Canada in 2023 and 2024 before the imposition of the 100% tariff. Furthermore, it only constitutes 19% of the 264,000 zero-emission vehicles sold in Canada in 2024, indicating that the majority of EVs will still be sourced from other regions.
While the influx of Chinese EVs may have a notable impact on EV sales in Canada, projections indicate that EV sales were already on a growth trajectory prior to this development, with an expectation that four out of every five light-duty vehicles sold in 2040 will be zero-emission vehicles. This suggests that the influence of Chinese imports may diminish over time.
The potential effect of Chinese EVs on overall EV sales remains uncertain. The availability of lower-priced Chinese vehicles could introduce competition and expand the options for affordable EVs in the market, potentially influencing consumer choices and adoption rates. Additionally, the presence of these vehicles could lead to a decrease in the prices of used EVs, attracting a new segment of buyers to the EV market.
Regarding the charging infrastructure, Canada currently has a substantial number of public EV chargers across the country, which should be adequate to accommodate the anticipated increase in EVs. However, there are still notable gaps in charging infrastructure, particularly in remote areas and multi-unit residential buildings, which may impede EV adoption in these segments of the population.
In preparation for the surge in EVs, utilities across Canada are making adjustments to the grid infrastructure. The flexibility of EV charging schedules offers opportunities to optimize existing infrastructure efficiently, potentially reducing electricity costs. Policies like the ZEV Availability Standard provide utilities with a framework to forecast and plan for the growing EV market, ensuring that infrastructure investments align with future demand.