Zhejiang Geely Holding Group Co. said Canada’s decision to slash tariffs on Chinese electric vehicles represents a positive step for the company’s expansion plans in North America, where several of its brands have faced significant trade barriers.
The Chinese automotive giant, which controls Lotus, Volvo, Polestar and several other marques, is eyeing the Canadian market as an entry point to the continent while US tariffs on Chinese-made vehicles remain at 100%.
Lotus Price Cut
Lotus, Geely’s luxury EV brand, said Sunday that the tariff cut would allow it to reduce prices for its Eletre SUV in Canada by “approximately 50%.”
The brand’s chief Qingfeng Feng said the company would “seize this opportunity to enhance investment in Canada to explore any potential tactical advantages and strengthen our footprint in the North American market.”
The new policy “creates a more open and fair market environment for international auto brands,” Feng added.
Polestar Relief
The Gothenburg-headquartered premium brand Polestar has been particularly affected by tariffs on Chinese-made vehicles.
The company quietly removed its entry-level Polestar 2 from its US website in April 2025 when 25% tariffs on foreign-made vehicles took effect, saying its Polestar 3 and Polestar 4 would “be the priority in the North American market.”
Bloomberg Intelligence analyst Joanna Chen said Monday that Tesla, Volvo Cars and Polestar are among the near-term winners from Canada’s new tariff policy of 6.1%, down from 100%.
Volvo US Sales
Volvo, another Geely-controlled brand, saw its fully electric vehicle sales in the United States nearly double in 2025 despite the challenging tariff environment.
The Swedish automaker sold 10,708 battery electric vehicles in the US last year, up 91% from 5,608 in 2024.
However, plug-in hybrid sales collapsed 40% to 22,379 units from 37,294, dragging overall electrified vehicle sales down 23% to 33,087 units.
Total US sales fell 3% to 121,607 vehicles, with mild hybrids and internal combustion engine models rising 8% to 88,520 units as the $7,500 EV Tax Incentive expired on September 30.
Trade Deal
Canada agreed Friday to allow up to 49,000 Chinese electric vehicles annually at the reduced rate as part of a broader trade agreement between Prime Minister Mark Carney and Chinese President Xi Jinping.
By 2030, half of the import quota must be priced at C$35,000 or less to give consumers lower-cost options.
Industry Minister Mélanie Joly met with BYD and Chery Automobile during the Beijing trip, Bloomberg reported Saturday.
She also met with Canadian auto parts supplier Magna International as Ottawa prepares to unveil a new automotive strategy in February.
The plan would give preferential market access to companies that build vehicles in Canada and could allow Chinese manufacturers to establish local production for the first time — subject to restrictions that may include using Canadian software and forming joint ventures with domestic firms, according to a government official.
US Criticism
The deal drew sharp criticism from US Trade Representative Jamieson Greer, who called it “problematic for Canada,” and Transportation Secretary Sean Duffy, who said Canada would regret allowing Chinese EV imports.
President Donald Trump, however, endorsed the agreement. “That’s OK, that’s what he should be doing,” he said Friday. “If you can get a deal with China you should do that.”
