Understanding high-variability speech is particularly challenging for second-language (L2) learners due to difficulties with extrinsic normalization, a perceptual strategy utilizing contextual cues to overcome speech variability. This study investigates the neural correlates of these difficulties among Mandarin speakers learning Cantonese, using EEG. Behaviorally, Mandarin learners demonstrated a significant yet considerably reduced ability to normalize Cantonese tone variability with contexts compared to native Cantonese speakers. EEG analysis showed that while native speakers engage multiple neural components (N1, P2, and LPC) for acoustic, phonetic/phonological, and cognitive adjustments in extrinsic normalization, Mandarin learners only activated P2, focusing on phonetic/phonological adjustments. This discrepancy underscores the multi-faceted nature of successful extrinsic normalization, which L2 learners fail to fully engage. L2 immersion significantly improves extrinsic normalization, particularly at the cognitive-adjustment stage. Overall, this study illuminates the intricate nature of poor extrinsic normalization in L2 learners and the importance of L2 immersion for effective L2 speech perception.