1Canada’s March 1, 2026 permit‑and‑quota regime re‑opens a path for Chinese‑origin EVs to enter the country at a 6.1% MFN tariff within a 49,000‑unit annual cap, replacing the prior 100% surtax barrier. This policy change compresses timelines for market entry and will filter quickly into claims mix and severity.
Solera wanted to discover lessons learned in other markets where Chinese EVs are already in the car parc and discuss the implications for their introduction into the Canadian market.
Using Solera’s vast Global Data Lake, we analyzed repairable EV claims from 2025 through Q1 2026 for model years less than or equal to five years of age (current year models are considered to be Year 0). Data from Australia, France, Germany and the U.K. were compared against Canada, with all costs converted to Canadian dollars. While this analysis incorporates data from tens of thousands of EVs, it is important to note that smaller data segments are intended for directional insights rather than precise measurement.
To compare repair costs fairly across markets, we normalize to Canada using a modified version of The Economist’s Big Mac Index for purchasing power parity (PPP). Rather than using the beloved Big Mac, we anchor the translation on a cross‑market control —the Tesla Model Y, the first EV to become the world’s best‑selling private passenger vehicle. This allows us to remove country‑level repair cost‑level noise. Although we recognize that we are oversimplifying the story – since many regional factors come into play – this lets us translate observed severities abroad into Canada‑equivalent values with fewer market idiosyncrasies.
To start, we compared the average Canadian insurer repair costs for the Model Y against the benchmark countries. Canadian repair costs averaged slightly more than $7,000. As shown at right, the UK tracks modestly above Canada on gross severity while Germany, France and Australia trend below. Notably, France’s severity was 38% lower than Canada.
According to current literature, BYD, MG, Geely, Chery, Leapmotor, and GWM (Great White Motor) are anticipated to be among the initial entrants into the Canadian market. Drawing on Solera data from these benchmark countries, our analysis focuses on selected BYD and MG electric vehicles. Solera then used these Model Y indices to translate observed severities for the expected entrants (BYD Dolphin/Atto 3/Seal/Seagull, MG4/ZS EV) into projected Canadian severities and cost mixes. Using the PPP‑anchored translation and Model Y share multipliers, we project repair costs landing below Model Y severity ($7,000) and in line with typical ICE vehicle costs for smaller vehicles, with ranges from $4,400 to $5,500.
Interestingly, smaller does not always mean lower severity. The BYD Seal sedan, which will likely be a direct competitor to the Tesla Model 3, had the lowest average severity ($4,400) among these expected entrants. This is even though it is the largest vehicle analyzed in terms of size at approximately 2,000 kg.
Operationally, Canadian carriers should work closely with the entire supply chain to manage logistics SLAs, harden calibration documentation standards, and tune paint‑materials controls. To mitigate high numbers of economic total losses for new vehicles, insurers should work with the OEs to ensure OE and alternative parts are available as quickly as possible in the Canadian market. Supply chain efficiency is paramount in order to avoid excess cycle time.
Repairers should double‑down on high‑voltage safety, particularly for the new lithiumironphosphate (LFP) battery within the Chinese EVs, ADAS setup discipline, and blueprinting—to absorb an influx of compact EV work without elevating cycle time.
