Tesla is set to ship cars from China to North America for the first time, as it begins producing a version of the Model Y in Shanghai to be sold in Canada later this year. This move will connect Tesla’s largest and most cost-efficient factory in the world to North America, its largest market, and is expected to be a significant development for the electric vehicle maker.
The news was confirmed by an individual with direct knowledge of the plan and a production memo seen by Reuters. According to the memo, the vehicles have been designed and tested for export to North America, with a target of producing almost 9,000 this quarter.
“The move would connect Tesla’s biggest and most cost-efficient factory in the world to North America, its largest market. The Model Y is the electric vehicle (EV) maker’s best-selling model globally,” said the source.
The Canadian government has also updated its website to show that the new version of the Model Y and the more expensive long-range variant both qualify for incentives of CAD 5,000 on purchase or a four-year lease.
Over the weekend, Tesla posted on its website that it would offer a new, cheaper version of its Model Y in Canada, a rear-wheel drive variant of the SUV-styled crossover priced CAD 10,000 lower than the long-range version of the vehicle available in that market.
Tesla CEO Elon Musk has previously denied that the company had plans to export made-in-China vehicles to North America. However, Tesla’s Shanghai plant is reportedly the company’s most cost-efficient facility, and Musk has previously commented that it has the “lowest cost structure” of any of its factories.
The introduction of the cheaper Model Y for Canada, with an EPA-rated range of 245 miles on a charge, qualified both it and Tesla’s CAD 69,900 long-range Model Y for the incentive as of Friday, according to Transport Canada.
Tesla’s Shanghai plant uses lithium-iron phosphate (LFP) batteries for the Model Y version produced there for sale in China and for export to Europe and other markets. In contrast, its factories in Texas and California are rolling out a more powerful battery configuration known as 4680.
While Tesla’s move to ship cars from China to North America is a significant development, it is not alone in exporting EVs from the country. Renault exports the Spring, an entry-level hatchback EV to Europe under its Dacia brand, while BMW exports the iX3 from China to Southeast Asia and Europe.
China’s overall car exports grew four-fold between 2020 and 2022 to top two million vehicles and are on track to top three million this year if the first-quarter pace is sustained.
