Tesla has recently made a significant move in the Canadian market by slashing the price of its Model Y Long Range All-Wheel Drive (AWD) by $20,000 CAD. This bold price cut brings the cost of the Model Y back below pre-tariff levels, making it a much more attractive option for Canadian buyers.
The new price for the Model Y Long Range AWD is now listed at $64,990 on Tesla’s Canadian website, down from its previous price of $84,990. This adjustment comes after Canada imposed a 25% tax on non-CUSMA-compliant U.S.-made vehicles in April 2025. Interestingly, the current price is $5,000 lower than the pre-tariff price, making it a highly competitive offering in the market.
One of the key reasons for this substantial price drop could be Tesla’s decision to shift production of Model Y units for the Canadian market to Gigafactory Berlin in Germany. This move allows Tesla to avoid the tariffs and offer the Model Y at a more competitive price point. It’s worth noting that Giga Berlin exclusively manufactures the Model Y, which explains why other Tesla vehicles in Canada have not seen similar price cuts.
Additionally, the introduction of the Diamond Black paint option for Canadian buyers, priced at $2,000, adds another level of customization for potential customers. This color option was previously only available in the U.S., showcasing Tesla’s commitment to meeting the preferences of Canadian consumers.
The extended delivery window for the Model Y in Canada, estimated at September to October, aligns with import timelines from Europe, further supporting the theory that Tesla is sourcing its Canadian units from Germany. With Canada’s steep tariffs on Chinese-made EVs ruling out imports from Gigafactory Shanghai, Germany emerges as a strategic source for Tesla’s Canadian market.
Tesla’s decision to automatically adjust pricing on undelivered Model Y orders to the new lower price demonstrates the company’s dedication to winning back Canadian buyers and regaining lost market share. The Canadian EV market has faced challenges in 2025, with registrations dropping significantly due to various factors, including the end of federal iZEV rebates and cuts to provincial EV incentives. The price hikes triggered by new tariffs have also played a significant role in the decline.
Overall, Tesla’s aggressive price cut on the Model Y showcases its commitment to staying competitive in the Canadian market and attracting more buyers. By offering a high-quality electric vehicle at a more affordable price point, Tesla is poised to make a strong comeback and reclaim its position as a leader in the Canadian EV market.