Tesla slashes prices in Canada despite tariffs as sales basically go to 0

Tesla has slashed prices on the Model Y in Canada despite tariffs as sales in the country have virtually gone to zero over the last few months.

Following President Trump’s reversal of a free trade agreement with Canada from his previous term and the application of tariffs on Canadian trade earlier this year, Ottawa has imposed a 25% “counter-measure surtax” on all passenger cars and light trucks originating in the United States since 9 April 2025.

This has considerably lower availability of electric vehicles in Canada, and it has basically killed Tesla’s sales in the market, on top of brand damage caused by Elon Musk, who backed Trump and said things like “Canada is not a real country.”

With Trump threatening a new 35% tariff across the board on goods coming from Canada starting August 1st, the situation doesn’t appear to be going in the right direction.

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Nonetheless, Tesla has decided to slash prices on its Model Y in Canada.

Following the tariffs, Tesla increased the price of the Model Y to $84,000 CAD, which is the equivalent of $61,500 USD or about $20,000 USD more than the cost of the Model Y Long Range AWD in the US.

Virtually, no one ordered the vehicle, and Tesla simply liquidated its inventory in Canada, where sales slowed to a crawl over the last quarter.

Now, Tesla announced that it is reducing the price of the Model Y by about $20,000 in Canada:

The Tesla Model Y now starts at $65,000, about $20,000 lower than it was yesterday, and only the Model Y Long Range AWD is offered.

This could be explained by Tesla importing the vehicle from Gigafactory Berlin in Germany rather than the US.

The fact that Tesla is talking about deliveries in “Sep – Oct 2025” for new orders also suggests that the vehicles are coming from overseas.

Electrek’s Take

This is undoubtedly going to help sales in Canada, which are currently virtually non-existent. Tesla has 35 stores in the country, and they essentially serve as showrooms and service centers now.

Now, the tariffs weren’t Tesla’s only problem in Canada. The company suffered extreme brand damage from Musk’s association with Trump.

That is expected to last, especially now that Musk’s favorability rating is at an all-time low.

But I’m sure that the tariffs had a bigger impact on sales than brand damage so we should see Tesla go back to delivering maybe a few thousands units per quarter in Canada.