Tesla Slashes Model 3 Prices in Canada with Chinese Imports Under New Trade Deal

Tesla is capitalizing on reduced tariffs for Chinese-built electric vehicles (EVs) by importing Model 3s to Canada at significantly lower prices than in the US.

Under a new trade deal finalized earlier this year, up to 49,000 EVs built in China can be imported to Canada annually at a reduced tariff rate of 6.1%. Previously, these vehicles faced a 106.1% tariff imposed in 2024. Canadian officials began issuing permits for the first 24,500 vehicles in March 2025, and Tesla quickly moved to take advantage of the opportunity.

Tesla’s Cheapest Model 3 Ever in North America

By importing the Model 3 from China, Tesla has reintroduced the entry-level Model 3 Premium RWD to the Canadian market. The Shanghai-spec Model 3 is priced from CA$39,490 (US$29,007) before delivery, making it the cheapest Tesla ever sold in North America.

This price undercuts the most affordable Model 3 available in the US, the standard RWD model, which starts at US$36,990 before taxes and delivery fees. The Chinese-built Model 3 features a quoted driving range of 463 km (288 miles) and accelerates from 0 to 100 km/h (62 mph) in 5.2 seconds.

Before the trade deal took effect, the most affordable Model 3 in Canada was the Long Range AWD shipped from Fremont, California, priced at CA$79,990 (US$58,700). While not a direct spec-for-spec comparison, Tesla has effectively halved its Canadian entry price overnight.

Model 3 Performance Price Drop

Canadian buyers can also order the Model 3 Performance trim, now priced from CA$74,990 (US$55,050). This represents a 17% reduction from the previous price of CA$89,990 (US$66,070), bringing the Canadian price roughly in line with the US$54,490 sticker price for the same trim in the US.

Tesla has not confirmed the origin of the Model 3 Performance models for Canada, though reports suggest Fremont, California, remains the likely source.

Exclusion from Canadian EV Rebate Program

One notable drawback of Tesla’s Chinese imports is that they do not qualify for Canada’s Electric Vehicle Affordability Program (EVAP) rebate, which offers a $5,000 discount. According to Drive Tesla Canada, this exclusion applies to all Chinese-built Model 3s currently being imported.

Permits Issued on First-Come, First-Served Basis

It remains unclear how many of the initial 24,500 permits Tesla will secure, as Canadian officials have confirmed they are being issued on a first-come, first-served basis. Unless competitors like Volvo and Polestar expedite their own Chinese-built EV imports, Tesla is positioned to dominate the Canadian market for affordable EVs.