Tesla has slashed the price of its Model Y Long Range All-Wheel Drive (AWD) in Canada by a whopping $20,000 CAD, bringing it back below pre-tariff levels and making it a far more attractive buy.
As of Thursday night, Tesla’s Canadian website now lists the Model Y Long Range AWD at $64,990, down from its previous price of $84,990. The company announced the change on X. Notably, this new price is $5,000 lower than the pre-tariff price before Canada imposed a 25% tax on non-CUSMA-compliant U.S.-made vehicles in April 2025.
This sharp price drop likely signals that Tesla has shifted production of Model Y units for the Canadian market to Gigafactory Berlin in Germany, sidestepping the tariffs. Giga Berlin exclusively manufactures the Model Y, which explains why other Tesla vehicles in Canada — including the Model S, Model X, Model 3, and Cybertruck — have not seen similar price cuts. Interestingly, the Model Y AWD now undercuts the Model 3 AWD in Canada by $15,000.
Canada’s steep 100% tariffs on Chinese-made EVs rule out imports from Gigafactory Shanghai, leaving Germany as Tesla’s likely source. Further supporting this theory is the extended delivery window for the Model Y in Canada — currently estimated at September to October — which aligns with import timelines from Europe.
Tesla also introduced the new Diamond Black paint option for Canadian buyers, priced at $2,000. The color was previously only available in the U.S. but has now made its way north.
Tesla is automatically adjusting pricing on any undelivered Model Y orders to the new lower price. The EV giant’s Canadian sales have taken a major hit in 2025, with registrations plummeting 67% during the first half of the year. This sharp decline has been driven by several factors, including the end of the federal iZEV rebate and cuts to provincial EV incentives, but the steep price hikes triggered by new tariffs have been a major contributor.
With this aggressive $20,000 price cut on the Model Y, Tesla is clearly aiming to win back Canadian buyers and recover some of its lost market share.
