Tesla has started producing a version of its Model Y electric vehicle (EV) in Shanghai, set to be exported to Canada, marking the first time the company will ship cars from China to North America, according to an insider source and a production memo obtained by Reuters.
This move connects Tesla’s most cost-efficient factory globally to its largest market, with the Model Y being its best-selling model worldwide.
Last week, Tesla announced on its website a new, more affordable Model Y variant for Canadian customers, priced $10,000 CAD ($7,377.90 USD) lower than the long-range version available in the country. The rear-wheel drive SUV-styled crossover is expected to be delivered between May and July and starts at $59,990 CAD.
Given the specs of the Model Y RWD in Canada, many suspected it matched the same RWD Model Y in China, so that would mean LFP batteries, made at Giga Shanghai. Tesla also has LFP batteries for its Model 3 RWD.
The Canadian government updated its website on Friday, revealing that both the new and the long-range versions of the Model Y qualify for incentives of $5,000 CAD on purchase or a four-year lease. The addition of the cheaper RWD Model Y’s price point also made the vehicle qualify for numerous provincial incentives on top of the federal iZEV rebate. It’s possible to get up to $12,000 off the Model Y.
Production of the Canada-bound Model Y began earlier this month at Tesla’s Shanghai factory, with a target of nearly 9,000 vehicles for this quarter. Many have touted the better build quality of Giga Shanghai vehicles as superior to those from Tesla’s factory in Fremont, California.
Tesla CEO Elon Musk previously highlighted the Shanghai plant’s “lowest cost structure” among the company’s factories. The new Model Y variant, priced at $44,275, is cheaper than the entry-level U.S. model, which costs $46,990. The introduction of the more affordable Model Y has sparked a price war on EVs and contributed to a decrease in Tesla’s first-quarter margin.
