Tesla has slashed the price of its Model Y Long Range All-Wheel Drive by CAD 20,000 in Canada, bringing it back to pre-tariff levels amid signs the automaker has begun sourcing the vehicle from its German factory in Grünheide rather than from the United States.
The Model Y is now listed at CAD 64,990 (approximately €40,600) on Tesla Canada’s configurator, a sharp drop from the CAD 84,990 price that had been in effect since April following the imposition of new Canadian import tariffs. The timing and scale of the price cut suggest a strategic shift in supply chains to avoid duties on U.S.-made vehicles.
According to Drive Tesla Canada, the move likely signals that Canadian-bound Model Ys will now be shipped from Tesla’s European production facility outside Berlin. Supporting this theory is the fact that Tesla has only cut prices for the Model Y – not for its other U.S.-made models – and that estimated delivery times now stretch into September and October, an unusually long wait that aligns with transatlantic logistics.
Further pointing to German origin is the availability of the ‘Diamond Black’ exterior finish, which is produced at the Grünheide factory but not in Tesla’s American plants. While Tesla could theoretically supply the Canadian market from Giga Shanghai, doing so would expose the vehicles to Canada’s 100% tariff on Chinese-made EVs introduced last year.
In parallel, Tesla Canada has been cleared of fraud allegations stemming from a surge in government rebate applications earlier this year. Transport Canada concluded its investigation into claims that Tesla dealerships had submitted an unusually large number of requests for EV incentives – over 8,000 deliveries totaling CAD 43.2 million in claims – and found no wrongdoing. The automaker had attributed the spike to an accelerated delivery effort to help customers qualify before federal rebates ran out.