Tesla’s slashing its Model Y price in Canada by $20,000, bringing the electric SUV down to $64,990. The new price puts the Model Y at $5,000 below where it was before April 2025, when Canada imposed a 25% tariff on U.S.-made electric vehicles.
Tesla drops Model Y price $20,000 in Canada, ducking tariffs by importing from Germany instead of U.S.
Anyone who already ordered a Model Y but hasn’t received it yet will automatically get the lower price. The price cut marks a significant turnaround for Tesla, whose Canadian sales plummeted 67% in the first half of 2025. The tesla model y price drop news has generated significant buzz among both prospective buyers and industry analysts, potentially revitalizing interest in the brand. Many are speculating that this aggressive pricing strategy could lead to a resurgence in Tesla’s market share as they aim to compete more effectively against other electric vehicle manufacturers. Additionally, this move may reflect a broader trend in the automotive industry, where price adjustments are becoming increasingly common in response to fluctuating demand.
The price cut appears tied to a major shift in Tesla’s strategy. Instead of shipping Model Y vehicles from U.S. factories, Tesla’s now importing them from its Berlin plant in Germany. This move lets Tesla dodge the hefty Canadian tariffs that crushed its sales after April.
The Berlin factory only makes Model Y vehicles, making this switch possible. Tesla’s Canadian sales dropped close to zero after the tariffs kicked in. Ottawa introduced the 25% tax to strike back at Trump-era trade policies and Elon Musk’s comment that “Canada is not a real country.”
The situation got worse when Trump threatened to hit Canadian goods with a 35% tariff. Canada also imposed 100% tariffs on electric cars from China, leaving Germany as Tesla’s most favorable import option. Other Tesla models haven’t gotten price cuts. The Model S, Model X, Model 3, and Cybertruck still carry their post-tariff prices since they’re made in the U.S.
This makes the Model Y particularly attractive – it’s now $15,000 cheaper than the Model 3 All-Wheel Drive in Canada. Customers ordering the newly priced Model Y won’t get their vehicles until September or October 2025.
That’s longer than typical deliveries from the U.S., likely because the cars need to cross the Atlantic Ocean. Tesla’s also adding a new Diamond Black paint option for $2,000, giving buyers another color choice.
The price cut brings the Model Y back to competitive levels in Canada’s struggling EV market. Many electric vehicles became too expensive after the tariffs, limiting what Canadians could buy.