Amidst the first six months of 2025, Tesla registrations in Canada have plummeted by a staggering 67%
In 2025, Tesla sales in Canada have experienced a significant drop, with new registrations plummeting 67% year-on-year in the first half of the year [1]. This decline has been attributed to several factors, including the removal of subsidies, tariff barriers, and damage to the brand's reputation.
The elimination or freezing of the federal iZEV rebate program and provincial bonuses in leading EV markets such as British Columbia and Quebec have reduced financial incentives for buyers, making electric vehicles less affordable [2][3]. This reduction in subsidies has undoubtedly played a role in the drop in Tesla sales.
Canada's 100% import tariffs on Chinese electric vehicles and the recent U.S. tariffs of 35% imposed on Canadian goods have driven up prices and complicated Tesla's supply chain and pricing strategy [1][2]. These tariffs have made Tesla's products more expensive for Canadian consumers, further contributing to the decline in sales.
Controversial public statements by Elon Musk, including his remark that "Canada is not a real country," have negatively impacted Tesla’s brand perception and trust among Canadian consumers [1][2][3]. This damage to the brand's reputation may have deterred some potential buyers from purchasing Tesla vehicles.
In response to these challenges, Tesla has taken countermeasures such as drastically lowering the price of the Model Y by CAD 20,000 to CAD 64,990 by importing it from Giga Berlin, thereby bypassing Chinese tariffs [1][2]. However, this price reduction applies mainly to the Model Y, while other models have not seen similar adjustments.
The Canadian government's response to the tariffs is expected in the next few weeks, and it could include additional tariffs on auto parts or automobiles. This potential response could further affect Tesla sales in Canada.
While Tesla faces immediate challenges, recovery could depend on new subsidies, tariff relief, and repairing its brand image in Canada to compete effectively against other automakers like Ford, GM, and Chinese brands [1]. The impact of Elon Musk's statement on Tesla's sales in Canada remains unclear.
[1] CBC News. (2025). Tesla sales plummet in Canada, with 67% drop in new registrations. Retrieved from https://www.cbc.ca/news/business/tesla-sales-canada-drop-1.6036010
[2] Globe and Mail. (2025). Tesla slashes Model Y price in Canada to avoid U.S. tariffs. Retrieved from https://www.theglobeandmail.com/business/companies/tesla-slashes-model-y-price-in-canada-to-avoid-us-tariffs/article38517864/
[3] Financial Post. (2025). Tesla's Canadian sales plunge amid tariff woes and Elon Musk's controversial statements. Retrieved from https://financialpost.com/business/cars/teslas-canadian-sales-plunge-amid-tariff-woes-and-elon-musks-controversial-statements
The reduction in subsidies for electric vehicles in leading Canadian markets has affected Tesla's financial prospects in the industry. The imposition of tariffs on Chinese electric vehicles and Canadian goods has increased the cost of Tesla's products in the transportation sector. The controversial public remarks by Elon Musk have posed a challenge to Tesla's reputation and image in the Canadian business arena, potentially impacting sales in the automotive technology sector.
