Tesla responded to the sales crisis in Canada with a significant price cut. The company lowered the price of the Model Y Long Range AWD version from $84,990 to $64,990. Following this $20,000 reduction, Tesla’s best-selling SUV returned to its pre-tariff price. The decision was quietly posted on the company’s official website and quickly garnered widespread attention on social media.
Tesla Model Y price drops by $20,000 in Canada!
The price cut is reportedly due to Tesla’s significant decline in the Canadian market. As of April 9, 2025, the Canadian government implemented a 25% additional tax on all vehicles imported from the US. This additional tax directly impacted Tesla’s Canadian operations, which rely on US-based manufacturing.
With this tax, the Model Y’s price rose rapidly to $85,000, bringing sales to a standstill. While Tesla doesn’t release sales data by country, it has been confirmed that global sales fell by 13.5% in the second quarter of 2025.
The company’s new move is based on a strategy to circumvent tariffs by importing vehicles from its Gigafactory facility in Berlin. By redirecting European-produced Model Ys to Canada, prices have been reduced to pre-tax levels.
However, this strategic move has created a distorted pricing landscape across the product line. Currently, the Model Y is approximately $6,000 cheaper than the entry-level sedan Model 3. The Model 3 Long Range AWD version is available on Tesla’s Canadian website for $70,772.
In social media, some users expressed surprise at the significant discount, while those who recently purchased the Model Y at a higher price expressed their disappointment. Comments like “$20,000… Unbelievable” and “I feel sorry for those who paid $85,000” were notable, while those planning to purchase the vehicle shared their excitement at the new price.
Additionally, a new exclusive exterior color option called Diamond Black was announced as part of the update, with an additional price of $2,000.
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