Affected by Canada's new trade policy, Tesla has cleared all its local Model 3 inventory and shipped back to the U.S. all American-made vehicles originally intended for sale in Canada. Starting March 1, Canada significantly reduced import tariffs on Chinese electric vehicles to 6.1%, but had previously imposed a 25% tariff on U.S.-made cars. This caused the price of the Model 3 Long Range variant to surge to nearly CAD 80,000, with approximately CAD 25,000 to 30,000 of that attributable to tariff costs. Since the Model 3 is not produced in Europe, Tesla cannot reroute supply from its German factory—as it did with the Model Y—to avoid these tariffs, leading to a sharp decline in demand. Consequently, Tesla has adjusted its strategy by halting Model 3 sales in Canada and redirecting those vehicles back to the U.S. market.