Canada’s electric vehicle (EV) transition has stumbled. After Ottawa scrapped its EV mandate and scaled back incentives, sales plunged and manufacturers pulled back on investment. But while policy uncertainty has eroded confidence at home, one big external force may yet jolt the market: Chinese-made EVs.
For Derrick Osborn, national practice leader, automotive, at HUB International, the arrival of Chinese EVs is the “biggest variable” in how Canada’s EV story plays out from here.
“The big wild card is removing the big tariff on Chinese EVs,” Osborn says. “Now, all of a sudden, around 50,000 Chinese electric vehicles are going to be allowed in. That’s going to be a big change.”
“The tariff now is 6,1%,” he says. “So it's negligible. And they have their quota – they can get 49,000 vehicles into Canada, rising to 70,000 by 2030.”
What makes that shift so significant is not just volume, but what Chinese manufacturers bring to the table. In Osborn’s view, they are producing strong products at multiple price points – precisely what a fragile EV market needs.
“The Chinese are making great vehicles at all price points,” he says. “If you come in and you have a lower price point because you’ve got that economies of scale in your production, then perhaps maybe if that gains traction, that might increase adoption.”
In Canada, those problems are acute. As Osborn outlined in an earlier conversation, EV premiums on the personal lines side are roughly 30% higher than those for comparable internal combustion engine (ICE) vehicles – and they’re rising faster. Repair costs, expensive batteries, sophisticated sensors and a thin data set for actuaries all push coverage costs up, depressing adoption and feeding a vicious cycle.
Layer on top the collapse in policy certainty – the 2022 EV mandate, the aggressive 2035 target and a suite of incentives, all followed by a 2025 policy reversal and a drop in sales – and it’s clear why manufacturers have cooled on multibillion‑dollar commitments.
Against that backdrop, cheaper, mass‑produced Chinese EVs could play two roles at once: easing the affordability barrier for consumers and, over time, giving insurers the data volume they need to price risk more confidently.
Osborn said that EVs with an import price of $35,000 CAD or less will reach 50% by 2030. The first year of the quota has no requirement for sub-$35,000 vehicles – that affordability rule doesn't take effect until the 2027 quota year, he explained.
“If that gains traction, that might increase adoption,” Osborn says. “And once you’ve actually got more vehicles on the road, you get more claims data, more experience. That can eventually help bring pricing into line.”
None of this is automatic. Price isn’t the only hurdle. Canada still faces serious gaps in charging infrastructure, especially outside major urban centres, and lingering public skepticism over range, cold-weather performance and residual values.
But economics matter. If Chinese manufacturers can deliver EVs at significantly lower sticker prices than established players, they could change the adoption curve even without a return to aggressive mandates.
For insurers and brokers, that would introduce both opportunity and complexity.
On the one hand, a surge of lower‑priced EVs could diversify the risk pool and, in the long run, help normalise premium differentials between EVs and ICE vehicles. More units on the road mean a richer dataset for actuaries, better visibility into real‑world loss patterns, and more competitive pricing.
On the other hand, the shift in manufacturing geography and brand mix could create fresh questions around repair networks, parts availability, product liability and the role of importers.
Osborn has already warned that when there is no domestic parts supplier to sue, Canadian importers can find themselves effectively standing in as manufacturers in the eyes of the law. That raises the stakes for product liability coverage, recalls, and quality control when components are sourced from half a world away.
“Previously, all the tariffs were just way too punitive – they couldn’t get in,” he says of Chinese EV makers. “Now they can. And once they’re in, if something goes wrong, if there’s nobody to sue domestically, you’re going to sue the person who brought it into the country.”
That liability angle means brokers will need to keep a close eye not just on the vehicles themselves, but on the business models behind their arrival: which entities are importing them, who stands behind warranties, how recalls and repairs will be managed, and what protections exist for Canadian consumers if a foreign manufacturer runs into trouble.
Osborn said it’s impossible to know exactly how the Chinese wildcard will play out. But in a landscape where domestic mandates have been rolled back, incentives trimmed and legacy manufacturers are re‑thinking big EV bets, he sees the opening of Canada’s doors to Chinese EVs as one of the few developments capable of materially changing the trajectory.
“If that catches on, it could shift the whole conversation.”
