Tesla has significantly lowered the threshold for electric vehicle affordability in Canada with the introduction of the new Model 3 Premium Rear-Wheel Drive variant. By bringing back its entry-level sedan to the Canadian market, Tesla’s RWD Model 3 will now begin at $39,490 CAD, roughly equivalent to $29,000. This represents a dramatic drop from the previous entry-level price of $79,990 CAD (about $59,000), effectively cutting the cost nearly in half.
At the premium end of the spectrum, Tesla has also slashed the price of the Model 3 Performance for Canadian buyers from $89,000 CAD to $74,990 CAD, or approximately $55,000. This drastic price reduction stems from Tesla’s global supply chain adjustments and the shifting tariff landscape globally. Before 2024, Canadians could purchase Model 3s manufactured at Tesla’s Shanghai facility, but Canada later imposed a 100% tariff on Chinese-made EVs. Consequently, Tesla shifted to supplying vehicles from its Fremont, California plant to Canadian customers. However, after the Trump administration’s tariff policies, Canada retaliated with a 25% tariff on US-made vehicles, which pushed the price of the most affordable Model 3 to $79,990 CAD at that time.
In this latest development, Canada has lowered tariffs on Chinese-made EVs to just 6.1%, enabling Tesla to once again ship vehicles from its Giga Shanghai factory to Canada at more competitive prices. It is worth noting that the Model 3 Premium RWD variant is not currently eligible for Canada’s new Electric Vehicle Affordability Program, which offers incentives of up to $5,000 CAD. Although the recent incentive program has recently taken effect, the newest Model 3 does not qualify because it is not manufactured in Canada.