Tesla Halves Prices in Canada, Model 3 Starts at Just 198,000 Yuan, Lower Than in China
Recently, Tesla made significant price adjustments in Canada, with the Model 3's starting price dropping from 79,990 Canadian dollars (approximately 400,000 yuan) to 39,490 Canadian dollars (approximately 198,000 yuan), a 50% reduction and a historical low for Tesla in Canada. After the price cut, the Model 3 in the Canadian market is 37,000 yuan cheaper than the same model in China (235,500 yuan), breaking the long-standing pattern of China being Tesla's lowest-priced market globally.
This is mainly because the Model 3 supply for the Canadian market has completely switched from the Fremont factory in the United States to the Shanghai Super Factory.
The Shanghai factory, as Tesla's global lowest-cost production base, not only has a mature supply chain but also boasts lower labor costs, providing the foundation for the price halving.
In addition, at the beginning of 2026, Canada and China reached a tariff agreement, reducing the import tariff on Chinese-made electric vehicles within the quota (49,000 units/year) from 100% to 6.1%, with a quota of 24,500 units for the first half of the year.
In contrast, vehicles produced in the United States still require a 25% retaliatory tariff, giving the Chinese-made Model 3 an absolute cost advantage.
Furthermore, Tesla's sales in Canada plummeted by 60%-65% in 2025, being overtaken by General Motors and losing the title of EV sales leader. In order to regain the top spot and prepare for the entry of Chinese brands like BYD into the Canadian market, Tesla has significantly lowered its prices.
It is worth noting that the Chinese-made Model 3 is not eligible for the Canadian federal EV subsidy (up to 5,000 Canadian dollars). Even so, the post-tax price of the new car is still about 37,000 yuan lower than in the Chinese market, highlighting its cost-effectiveness.