Tesla Slashes Canadian Prices by Up to 50%, Model 3 Now Cheaper Than in China

In May 2024, Tesla significantly slashed prices for its Model 3 in the Canadian market. The starting price of the Premium Rear-Wheel Drive variant dropped from CAD 79,990 to CAD 39,490—a 50% reduction—marking the lowest price ever for this model in Canada. At the revised price, the Canadian Model 3 costs approximately RMB 198,000, undercutting its Chinese market price of RMB 235,500 and making Canada Tesla’s cheapest market globally. This price cut stems primarily from two factors: First, Canada will implement a new import tariff policy on Chinese-made electric vehicles starting in early 2026. Within an annual quota of 49,000 units (24,500 units in the first half), tariffs will drop from 100% to 6.1%. Second, Tesla has shifted Model 3 supply for the Canadian market from its Fremont factory in the U.S. to its Gigafactory Shanghai. Leveraging a mature supply chain and highly efficient production system, the Shanghai facility has become Tesla’s lowest-cost manufacturing base worldwide. By contrast, U.S.-built Teslas entering Canada remain subject to a 25% tariff, undermining their price competitiveness. Some Canadian consumers have taken to social media to express gratitude toward China, crediting low production costs at Chinese factories and the revised China-Canada tariff arrangement as key drivers behind the new low pricing. Moreover, Tesla faces mounting pressure from declining sales in Canada. In 2023, its deliveries fell by 60–65% year-over-year, allowing General Motors to overtake it as the country’s top-selling EV brand. With Chinese automakers like BYD poised to enter the Canadian market soon, Tesla’s latest price reduction is widely seen as a strategic move to counter intensifying competition and reclaim market share.