Tesla Adapts Pricing Strategy as Model Y Matches Model 3’s Base Price in Canada

Tesla has adjusted its pricing approach, resulting in the Model Y’s base price in Canada aligning with that of the Model 3. Despite the initial allure of the new Model 3 Highland facelift in the US, the Model Y gains traction, especially with federal subsidies narrowing the price gap.

The Model 3 Highland, priced from $38,990 in the US, faces exclusion from government tax credits due to its Chinese phosphate batteries. In contrast, the Model Y, priced at $36,490 for the Rear-Wheel Drive (RWD) variant after the tax credit, enjoys increased appeal with subsidies applied directly at the point of sale.

See also: Tesla Reportedly Plans Battery Plant Expansion in Nevada, Utilizing Equipment from CATL

Following Tesla’s recent Model Y price reductions in China and Europe, a significant drop of CA$4,000 in Canada has been implemented. This reduction not only stands as a notable adjustment but also qualifies for an additional CA$5,000 federal rebate.

Tesla Model 3. (Credit: Tesla)

Residents of Quebec, in particular, benefit further, as the latest price cut places the Model Y below the eligibility cutoff for the Roulez vert program. Consequently, an additional CA$7,000 in rebates becomes accessible, resulting in a substantial total incentive of CA$12,000. This brings the base Model Y price down to approximately US$31,300, a competitive figure even when compared to the US pricing with tax credits.

See also: Tesla Informs Suppliers of Mid-2025 Production Start for New Mass-Market Electric Vehicle, Codenamed “Redwood”

Interestingly, the official retail prices of both the Model Y and Model 3 in Canada are now identical, starting from CA$53,990 (US$40,230) before any federal or state tax credits and incentives are applied.

While the convergence of base prices for the Model Y and Model 3 may seem unconventional, Tesla’s upcoming release of the Model Y Juniper facelift in the summer hints at potential future price adjustments, possibly extending to the US market.

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