Tesla is dropping the price of its Model Y SUV by $20,000 in a bid to stay alive in Canada following a nosedive in sales, which saw it get as low as a 90 per cent drop in Quebec.
According to Gizmodo, the move is a direct response to the ongoing trade war that has severely harmed Tesla’s Canadian operations. In retaliation for the tariffs imposed by U.S. President Donald Trump, the Canadian government imposed a 25 per cent tariff on all vehicles imported from the U.S. starting on April 9, 2025. This forced Tesla to increase the Model Y’s price to $84,990.
Now, the Model Y can be ordered off Tesla’s website for $64,990, making it cheaper than the pre-tariff price hike. However, Tesla raised vehicle prices twice before the tariffs came into place, and the current Model Y price is still about $4,000 more than it cost at the beginning of the year.
The sudden price drop is due to Tesla changing the location of production for the Canadian Model Y vehicles to circumvent the tariff. As Electrek points out, Tesla began importing the Model Y from the Gigafactory in Berlin, meaning that the Canadian models are now sourced from Europe rather than the U.S.
Moreover, Tesla’s website now lists Model Y deliveries arriving between September and October, further indicating vehicles are shipping from Europe.
Another point to note, however, is that while there is a section on the website to customize and order the Model Y, the Model 3 currently reverts to the inventory page, with a small banner at the top, reading “receive pre-tariff pricing on remaining inventory.” Tesla has offered pre-tariff pricing on remaining inventory since April 2025.
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