Last week, a major market development was underestimated by the market.

Canada announced a significant reduction in tariffs on Chinese electric vehicles from 100% to 6.1%, while also opening an annual import quota of 49,000 units. This is not a small move—it directly breaks the previous North American trade protection trend following the US, marking a certain policy shift. What does this transformation mean for Chinese electric vehicle companies from being shut out to gaining substantial market access?

On the surface, it appears to be a trade policy adjustment, but behind the scenes, it involves the reallocation of the entire new energy vehicle industry chain. From automakers to battery suppliers, and upstream materials and equipment, this wave of benefits will be transmitted layer by layer.

**Who benefits first?**

Automakers are definitely in the first tier. BYD, as the global leader in electric vehicle shipments, already has a comprehensive sales system overseas. After the tariff cut, cost pressures are released, and their price competitiveness in North America directly improves. The company's export momentum abroad has been strong in recent years, and the quota bonus in Canada will further accelerate this trend.

SAIC's well-known brands (MG) have gained recognition in Southeast Asia and Europe, but the North American market has been a blank spot. Now, with tariffs dropping from 100% to 6.1%, there is nearly a tenfold improvement in cost optimization space. Imagine, a car originally priced at 500,000 RMB could now be sold at 400,000 or even lower—how attractive is this to North American consumers?

Changan, Geely, and other new energy vehicle matrices have also performed well in recent years. Sub-brands like Deep Blue, Zeekr, and Geometry are still mainly domestic, but their production capacity is in place. Once the exposure in Canada opens up, these brands can immediately expand into North America. Moreover, this tariff adjustment is likely to prompt policy reassessment in the EU, Japan, and other regions—truly opening the door to the globalization of Chinese electric vehicles.

NIO, Xpeng, and Li Auto, although positioned at a higher-end market, will also see improvements in their overseas cost structures after the Canadian quota is released. Consumers will be able to buy at more reasonable prices, expanding the overseas user base, which is crucial for global brand development.

**How will the upstream supply chain respond?**

The growth in vehicle exports ultimately depends on the support of the supply chain. CATL and Guoxuan High-tech, as core suppliers of power batteries, will see their battery orders surge as the North American shipments of these automakers increase. Especially CATL, with numerous supporting automakers and deep capacity reserves, will benefit directly from the Canadian market release.

Companies like EVE Energy, which operate with a dual focus on batteries and energy storage, also fall into this category. Their overseas customer base is already rich, and the opening of the North American market will bring new demand.

Looking upstream, suppliers of lithium battery materials such as Shanshan and Putailai will see demand for core materials (anodes, electrolytes, cathodes) expand step by step. The additional annual quota of 49,000 units in North America, estimated at about 300 kg of battery packs per vehicle, translates into demand for tens of thousands of tons of lithium materials. Rongbai Technology, which supplies high-nickel cathode materials to top battery manufacturers, will see relatively direct growth in this segment.

**Opportunities across the industry chain**

In downstream components, suppliers like Xusheng Group and Top Group, with established customer bases, will see increased orders driven by North American automaker shipment growth. Sanhua Intelligent Controls' thermal management systems are standard for electric vehicles, and as EV sales rise, demand for thermal management will also increase.

Often overlooked is the equipment side. Leading lithium battery equipment supplier Lead Intelligent has a dominant global market share. Expansion of the industry chain means increased battery capacity, which requires additional equipment investment. Although this demand chain is somewhat lagging, its growth certainty is high.

At the very top, resource companies like Tianqi Lithium and Ganfeng Lithium will see their demand for lithium resources increase as the industry expands. The chain of transmission is clear: Canadian tariff liberalization → increased vehicle sales → increased battery demand → higher lithium salt demand.

**Why is this time different?**

The key is that this is a policy adjustment within the US dollar zone. Canada has followed the US in setting trade barriers for over two years. Now, breaking this pattern independently has a strong demonstration effect. The EU is likely to initiate a reassessment of tariffs in the future. As the EU and other developed countries gradually adjust their policies, the globalization of Chinese electric vehicles will shift from regional breakthroughs to comprehensive expansion.

This positive development involves listed companies across more than 20 segments, including vehicles, batteries, materials, equipment, components, and resources. In the short term, the most immediate beneficiaries are automakers with overseas sales systems—they can quickly absorb the additional quotas, driving order and profit growth. In the medium term, this demand growth will cascade upstream, with the prosperity of batteries and lithium resources continuing to rise. In the long term, this reflects China's further international competitiveness in the new energy industry, with related companies steadily expanding their global market share.

Market pricing often lags behind fundamental changes, and the industry chain opportunities brought by this policy shift may not yet be fully priced in. However, it is important to note that tariff policies are subject to change, and actual export execution by companies will be influenced by various factors.