I recently noticed a quite interesting market change. Tesla has started selling Chinese-made Model 3s in Canada, which was impossible to happen last year.

At the beginning of last year, Canada imposed a 100% tariff on Chinese electric vehicles, forcing Tesla to switch to American models. But this brought new problems—after a 25% tariff was added to U.S. vehicles, the price of the Model 3 soared to nearly 80,000 Canadian dollars. Earlier this year, Mark Carney reached an agreement with Beijing, reducing China's electric vehicle tariffs significantly to 6.1%, which opened the door.

Now, Tesla has launched a new Model 3 Premium RWD in Canada priced at 39,490 Canadian dollars, about $29,000, setting a new record for the lowest price of this model in Canada. These cars come from the Shanghai factory, with a single-charge range of 463 kilometers and acceleration to 100 km/h in 4.2 seconds. The performance version also dropped in price by 17%, from 89,990 CAD to 74,990 CAD. Interestingly, the same basic model in the U.S. is priced at $42,490, which is $31 more expensive than what Canadian consumers pay. The difference lies in the manufacturing location and applicable tax rates.

However, Canadian buyers face a restriction—vehicles made in Shanghai are not eligible for the $5,000 electric vehicle subsidy, as the government only offers subsidies for vehicles produced in countries with trade agreements. But even so, 39,490 CAD remains the lowest price Canadians can buy.

What does this trend reflect? Chinese automakers are expanding globally. Xiaomi only started making cars last year and is now preparing to enter Europe. Last year at the Beijing Auto Show, founder Lei Jun drove the SU7 from Beijing to Shanghai, a 1,300-kilometer trip with only one charging stop, live-streamed and drawing huge attention. Xiaomi’s Beijing factory produces a new car every 76 seconds, with automation levels exceeding 90% in some areas.

Xiaomi has established a research center in Munich, led by a former BMW executive to adapt vehicles to European regulations. Germany could become Xiaomi’s first European market in 2027. Xiaomi cars are priced between 27,000 and 38,000 euros, and last year, they ranked first in sales among similarly priced sedans in China. This year, they plan to deliver 550,000 units.

BYD is also moving quickly, planning to open 20 stores across Canada within a year. Import limits are also being adjusted, gradually increasing from the current 49,000 units to 70,000 by 2030.

The European electric vehicle market accounted for 17.4% of new car sales in 2025, up from 13.6% the previous year. But the EU is imposing additional tariffs on Chinese EVs and investigating whether China provides unfair subsidies. Market competition is indeed heating up, and the tariff adjustments in Canada might just be the beginning. Those interested should keep an eye on these Chinese automakers’ moves in the global market.