Tesla Model 3 Costs $8,000 Less in Canada Than in the U.S.

Tariff Woes

Tariffs on automotive products have become a major factor in recent times, with last year’s major changes, and car prices in the United States have gone up. In neighboring countries, the trend has been to work with other nations to lower car prices.

Canada recently struck a milestone deal with China that will allow it to benefit from lower tariffs, securing better prices for Chinese-made electric vehicles. Since the United States refuses to deal and allow Chinese manufacturers into the market, prices remain the same or higher.

China Made Tesla

One example: the cheapest Tesla, the base Model 3 in Canada, is now priced at $29,000, compared to the U.S., where the equivalent car and spec are $37,000. That $8,000 difference comes from the fact that Canada now sources its Model 3’s from China.

The new trade deal between China and Canada will see the tariff drop to 6.1% from the previous 100% rate implemented in 2024. It also means that Canada will allow the importation and sales of 49,000 China-built EVs, which, as we all know, are affordable.

Tesla is one of the first brands to take advantage of this new deal. The new base Model 3 is called the Premium RWD variant; it’s sourced from Shanghai and has a total driving range of 288 miles and a 0-60 mph time of 5.2 seconds.

Before this deal was finalized, the most affordable Tesla in Canada was the Long-range AWD, shipped from California, at $58,000. It may not be the same specs as the new base model, but in effect, Tesla Canada has halved the buy-in price of its most affordable unit because of this deal.

EVs for Canola Deal

How this deal came to fruition is simple economics: China needed help boosting its agricultural resources and selling its ever-expanding EV stocks, and Canada was all but willing to come to the table. In exchange for favorable rates on Chinese-made EVs, Canada will give them canola.

It will be capped in the meantime at 49,000 cars per annum, but the quota is set to increase to 70,000 by 2030. This newfound openness is being taken seriously by Chinese manufacturers, with BYD, Chery, and Geely already investing heavily to launch their Canadian operations.