Tesla saw its Canadian vehicle registrations fall 67% year-on-year in the first half of 2025, according to data from Automotive News, with just 9,000 units sold compared to more than 26,000 during the same period in 2024. The decline comes amid reduced incentives and rising geopolitical uncertainty.
The drop in sales follows the removal of federal and provincial EV rebates, particularly in British Columbia and Quebec—provinces previously leading in electric vehicle adoption. These cuts have significantly affected consumer affordability and demand for EVs across the country.
In response to the slowdown, Tesla reduced the price of its Model Y by C$20,000, bringing it below pre-tariff pricing. The price adjustment was made possible by shifting Model Y imports from China to Germany, circumventing recent tariff measures. Other Tesla models, however, did not see similar price reductions.
The situation is compounded by broader trade tensions. Last week, the U.S. administration imposed a 35% tariff on goods imported from Canada. The Canadian government is expected to announce retaliatory measures, which could include tariffs on auto parts or finished vehicles.
Industry analysts note that brand perception challenges may also be influencing demand. A controversial remark made by CEO Elon Musk—stating “Canada is not a real country”—continues to draw criticism. The long-term effect on Tesla’s image in Canada remains uncertain.