This article first appeared on GuruFocus.
Tesla (TSLA, Financials) stands to gain from Canada’s decision to drop its 100% tariff on Chinese made electric vehicles, opening the door for renewed shipments from the company’s Shanghai factory.
The new policy allows up to 49,000 Chinese vehicles a year at a 6.1% tariff, with potential expansion to 70,000 over five years. Tesla had outfitted its Shanghai plant in 2023 to build Canada specific Model Ys before exports were halted in 2024.
Industry analysts say Tesla’s existing Canadian network of 39 stores and its ability to shift production quickly give it a clear advantage over Chinese automakers such as BYD and Nio, which lack local sales infrastructure.
The move could help Tesla cut costs and strengthen its position in Canada’s growing EV market. The company has not commented on the policy change.