Canada has taken a step toward opening its electric vehicle market to China-made EVs, but the country will remain more of a testing ground than a mainstream destination for Chinese brands — at least for the next few years to come.

In a deal announced in mid-January, the North American country will allow up to 49,000 China-made EVs a year to enter the country under a 6.1 percent most-favored nation tariff.

That figure is basically China's exports to the country before it suddenly slapped a 100 percent surtax on China-made EVs in late 2024, mirroring the United States.

The quota is expected to rise gradually to 70,000 units a year within five years, which analysts say is part of Canada's effort to reset economic ties with China and diversify trade away from heavy reliance on the US.

Despite the policy shift, it may take some time for Chinese automakers to establish a meaningful foothold in Canada.

China-made EVs sold in the country before its abrupt imposition of a 100 percent surtax were primarily Tesla exports from its Shanghai plant, rather than Chinese brands.

Reuters reported that the US automaker started exporting vehicles from Shanghai to Canada in 2023. It boosted Canadian imports of vehicles in the year from China to its largest port, Vancouver, by 460 percent year-on-year to 44,356 units.

After the surtax, Tesla has been shipping vehicles to Canada from its German and US plants. A Tesla China representative told China Daily that she has no idea whether the Shanghai plant will export cars to Canada.

"Currently, the direct beneficiary would be Tesla," said Yale Zhang, managing director of Shanghai-based consulting firm Automotive Foresight.

He said Canada is a market worth a try for Chinese carmakers. "That is a solid 50,000 units," said Zhang.

But it will take a year or so for Chinese brands to finish vehicle certification and start building their points of sale.

"It could take two to three years of observing consumer response and the business environment before they consider the next move, say building a plant or buying a plant," he said.

Canada's auto market ranks eighth globally, with roughly 1.9 million new vehicles sold annually, with best-selling brands including Toyota, Honda, General Motors and Ford.

Zero-emission vehicles are gaining share, according to Statistics Canada data. In 2024 there were about 202,103 battery electric registrations and 68,882 plug-in hybrid registrations, meaning EVs accounted for 14.6 percent of new vehicle sales, or around 271,000 units in total.

Yet Chinese automakers have remained cautious about jumping in. The numbers reflect rising demand but underscore the relatively small scale compared with markets such as Southeast Asia or Europe.

In 2025, China exported 2.65 million NEVs, doubling the 2024 figure. The top five destinations were Belgium, Mexico, the United Kingdom, the Philippines and Brazil, according to the China Association of Automobile Manufacturers.

BYD said its passenger vehicles have not yet entered the Canadian market, although it runs an electric bus plant there.

A Geely representative said its brands have different global footprints and effects, describing the policy shift as "a positive step in the right direction" but saying it is "too early to comment on specifics".

Geely's international brands, including Volvo, Lotus and Polestar, are available in the North American country, but its indigenous marques are not present.

An analyst who wanted to stay anonymous said the former Canadian administration's close alignment with the US contributed to the cautious approach.

"Canada needs to show a real, long-term commitment to its relations with China before they will really grow their business and make investments in Canada. Building a plant is time-consuming and costly," said the analyst.

Political hurdles persist. Ontario Premier Doug Ford has been critical of Ottawa's electric vehicle deal with China. He called on Canadians to boycott Chinese-made EVs, reported CityNews Toronto.

Meanwhile, Canada is preparing a new automotive plan that is expected to outline strategic support for domestic production, according to Bloomberg.

A Canadian government official told Bloomberg that Chinese manufacturers building vehicles in Canada could receive preferential market access, but conditions may include the use of Canadian software and joint ventures with domestic firms — a model similar to other foreign entrants in western markets.

The timing is notable as western automakers reduce their Canadian footprint. In October, Stellantis abandoned an Ontario plant, leaving around 3,000 workers' jobs uncertain, while GM cut 1,200 jobs in Ontario and paused a billion-dollar investment in Quebec, according to the Financial Times.