Tesla reintroduces Shanghai-made Model 3s in Canada at record-low prices following tariff cuts
A reduction in duties on Chinese imports allows Tesla to resume shipping vehicles from its Shanghai factory, though the new models remain ineligible for federal purchase incentives.
Tesla has commenced sales of Model 3 vehicles manufactured at its Giga Shanghai factory in Canada, offering prices that start at $39,490 CAD. This move marks the lowest price ever recorded for the vehicle in the country and represents a reduction of nearly half compared to the previous entry-level price of $79,990 CAD. The shift comes after a significant adjustment in Canadian tariff policy, which lowered duties on Chinese-made electric vehicles from 100 per cent to 6.1 per cent.
Prior to 2024, Canadian residents could purchase Model 3s built in Shanghai, but a 100 per cent tariff was subsequently imposed on these imports. In response to US tariff campaigns under the Trump administration, Canada implemented a retaliatory 25 per cent tariff on US-made vehicles. This policy change forced Tesla to switch to offering EVs built in its Fremont, California factory to Canadian customers, driving the cost of the most affordable Model 3 up to the previous $79,990 CAD price point.
The latest pricing structure sees the Model 3 Premium Rear-Wheel Drive variant available at the reduced rate, while the Performance variant has also seen a price drop from $89,000 CAD to $74,990 CAD. These figures reflect the impact of the new trade environment, allowing Tesla to once again ship its EVs made in the Giga Shanghai factory into the country at more competitive rates. The current tariff reduction is a direct result of the change in Canadian import duties, enabling the resumption of sales for the Chinese-made inventory.
It is important to note that despite the lower sticker price, the new Chinese-made models are not currently eligible for Canada's Electric Vehicle Affordability Program. This government initiative offers up to $5,000 CAD in incentives to buyers of qualifying vehicles, but the new Model 3s do not apply because they are not manufactured domestically. Consequently, buyers must weigh the immediate savings against the loss of potential federal rebates.
The duration of the reduced 6.1 per cent tariff rate remains unspecified, creating some uncertainty regarding the sustainability of these prices. Future policy shifts or changes in trade negotiations could impact pricing again, meaning this aggressive pricing strategy may be a temporary measure rather than a long-term commitment. Investors and analysts will be watching to see if the current pricing is sustained or if it fluctuates with the broader geopolitical landscape.
