Canada is taking a major step toward opening its market to Chinese electric vehicles. In fact, Prime Minister Mark Carney recently announced that the country will cut its import tariff on Chinese EVs from 100% to just 6.1%. As a result, companies like BYD (BYDDF), Geely (GELYF), and Xiaomi (XIACF) will find it much easier to sell vehicles in Canada. That said, Canada is moving carefully, as it will cap imports at 49,000 vehicles per year initially, with that limit gradually rising to about 70,000 over the next five years.
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This move comes as China tries to expand its EV exports around the world. At the same time, the European Union is also considering lowering its own tariffs on Chinese electric vehicles. In contrast, the United States has no plans to reduce tariffs, although President Donald Trump recently said that he could support Chinese automakers building EV factories inside the U.S.
Nevertheless, there is significant resistance in the United States because, on top of pricing worries, U.S. officials have focused on national security risks tied to China’s EV supply chain. Additional legal barriers also exist, including rules limiting connected vehicle technology linked to China or Russia. As a result, Avery Ash, the CEO of Securing America’s Future Energy, warned that allowing Chinese automakers to build cars in the U.S. could damage the domestic auto industry, weaken the defense supply chain, and make the country less secure overall.
Which Chinese EV Stock Is the Better Buy?
Turning to Wall Street, out of the Chinese EV stocks mentioned above, analysts think that GELYF stock has the most room to run. In fact, GELYF’s average price target of $3.35 per share implies more than 51% upside potential.
