In January 2026, Canada is making a major shift in its electric vehicle (EV) policy. After nearly two years of enforcing a 100% tariff on Chinese-built EVs, the Canadian government has reached a new agreement with Beijing. The country will now move to a tariff-quota system, reopening the door for Chinese electric vehicles while keeping overall import volumes capped.
This policy shift has significant implications for Tesla Canada, the Used EV market, and consumers shopping for Used Tesla vehicles like the Model 3 and Model Y.
Canada Reopens Access to Chinese EVs
Under the new agreement, Canada will allow up to 49,000 Chinese-made EVs per year to enter the country with a 6.1% tariff—the same standard duty that existed before the 100% tariff was imposed.
By year five, the annual cap will increase to 70,000 EVs.
The federal government also “anticipates” that 50% of the 70,000 imported EVs will be affordable models priced under $35,000.
Prime Minister Mark Carney emphasized that this quota system reopens the market cautiously, noting that even 70,000 vehicles amount to less than 3% of Canada’s annual auto sales.
What This Means for Tesla Canada
This shift is especially important for Tesla Canada and the pricing of both new and Used Tesla vehicles.
Lower Tariffs Open the Door for Giga Shanghai Model 3
With Chinese-made vehicle tariffs returning to 6.1%, Tesla now regains the option of sourcing the Tesla Model 3 for Canada from its Shanghai Gigafactory.
This matters because:
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Tesla currently pays a 25% tariff on vehicles imported from the United States
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This forced a 20% price increase on newly imported Model 3 units
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Higher prices also increased demand for Used Tesla Model 3 vehicles in Canada
By shifting sourcing back to Shanghai, Tesla could stabilize or even lower prices, directly benefiting both buyers and the Used EV market.
Model Y Already Avoids Tariffs
Tesla has already sidestepped the U.S. tariff by importing the Model Y from Giga Berlin.
Model S / Model X Still Affected
Since the Model S and Model X are built exclusively in Fremont, California, their pricing will continue to reflect tariff costs.
Clarifying Confusion: Tesla Can Still Import the Model 3 Under the Quota
There has been misinformation circulating that Tesla would be excluded from the agreement. Here’s what government documents actually state:
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49,000 vehicles allowed in year one; increasing to 70,000 in year five
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By year five, 50% of imports must be under $35,000
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The agreement appears to phase in slowly, meaning early years have more flexibility
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Tesla would still be able to import at least 24,500 Model 3 units, likely more in the early years
This is positive news for new buyers and for Used Tesla pricing in Canada, as more supply typically stabilizes the market.
What This Means for Canada’s Used EV Market
The tariff reduction will have ripple effects across the entire Used EV landscape:
More supply of affordable EVs could put downward pressure on Used Tesla prices
Especially for Used Model 3 and Used Model Y.
More competition from Chinese brands means better pricing overall
BYD, Xiaomi, and other brands known for aggressive pricing will increase consumer choice.
Budget EVs under $20,000 may enter Canada
This has never existed in the Canadian EV market and could dramatically shift buying behaviour.
For a dealership like Carnex, which specializes in Used EVs and Used Teslas in Ontario, this shift could bring more buyers who are comparing budget-friendly new options with higher-value used options.
The Arrival of Chinese EV Brands: BYD, Xiaomi & More
The agreement gives Chinese manufacturers a realistic path into Canada for the first time.
BYD (Build Your Dreams)
Now the world’s largest EV seller, BYD already operates in dozens of markets.
Likely candidates for Canada include:
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BYD Atto 3 — compact SUV, similar size to a Model Y but cheaper
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BYD Dolphin / Seagull — smaller cars known for extremely low pricing
The BYD Seagull, priced at just C$11,000–17,000 in China, could theoretically sell under C$20,000 in Canada after tariffs — making it cheaper than most gas cars.
Such competition could reshape EV pricing and impact the resale value of Used EVs across the country.
Domestic Pushback and Concerns
Not everyone is welcoming this policy shift.
Ontario Premier Doug Ford publicly warned that the agreement:
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Could allow China to gain a strong foothold in Canada’s auto sector
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Might complicate Canadian access to the U.S. market
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Could threaten Canadian manufacturing jobs without stronger protections
The debate will likely continue as the policy evolves.
Conclusion: A Big Moment for Tesla Canada and the Used EV Market
The end of the 100% tariff marks a major turning point for Canada’s EV landscape.
For Tesla buyers, Used Tesla shoppers, and anyone considering a Used EV:
This new policy means:
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More Tesla Model 3 supply
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Potential stabilization of Used Tesla prices
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New affordable EV options from China
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Greater price competition across the EV market
As the Canadian EV market evolves, consumers will have more choices—and potentially better prices—than ever before.
How to Buy a Used Tesla
Looking to buy or sell a used Tesla in Canada? At Carnex, we provide transparent vehicle history reports, professional inspections, and competitive valuations to help you shop with confidence.
Are you considering a Tesla Model Y or model 3 for sale in Canada? If you enjoy our content and want to book a free test drive, please give us a call now! ☎️:647-812-1067
We have tons of Tesla inventory! Used Model 3, Model Y… Carnex is EV specialist whose location is in Mississauga, Ontario. We will provide low price and high quality if you choose to buy used Tesla from us. Feel Free to contact if you have any questions!
Visit Carnex.ca today to explore our latest inventory of used Teslas in Ontario — and experience the future of driving, today.
Article Source: DriveTesla Canada
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