Tesla sells Chinese-made electric cars in Canada


Tesla will go on sale in Canada with its China-made Model 3 and Model Y vehicles, its website showed on Tuesday, confirming the electric carmaker has completed its first shipment to North America from its Shanghai factory. Tesla’s website shows that the rear-wheel-drive Model Y and the long-range all-wheel-drive version of the Model 3 can be delivered immediately in British Columbia, and the code shows that they are produced at Tesla’s Shanghai Gigafactory.

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Updated on:
May 23, 2023 at 17:49 pm

The cost of a Tesla Model 3 vehicle in Canada is higher than the cost of an equivalent vehicle in China before the incentive. (Reuters)

Both models are eligible for a C$5,000 ($3,700) federal incentive in Canada, which, unlike the U.S., does not tie EV subsidies to the location of the factory where the cars are built.

Representatives for Tesla in China and the company’s U.S. headquarters did not immediately respond to requests for comment.

The company and other EV makers have a cost advantage in China as the Chinese market booms for exports. The China-made Model Y is priced at C$61,990 in Canada. That’s about 22 percent more than the cost of an equivalent vehicle in China before the incentives.

Tesla’s move to export from Shanghai to Canada could help U.S. sales of cars made at its California and Texas factories, which qualify for potential tax breaks of up to $7,500 under the Biden administration’s subsidy program .

It also opens up a new market for Tesla Shanghai, which accounted for more than half of the company’s production last year.

Electric cars produced at Tesla’s Shanghai factory are sold in China and exported to overseas markets, including Europe. But Tesla faces increasing competition on price and features from Chinese electric carmakers, and its Berlin factory has been ramping up Model Y production for European customers.

Tesla uses a code that corresponds to the first three digits of the Vehicle Identification Number, or VIN, when listing vehicles for sale. The VINs of Tesla models produced at the Shanghai factory all start with the letters “LRW”.

It is unclear how many Chinese-made Tesla vehicles are available for purchase in Canada or how many have been sold.

Tesla said last month that it would offer a new, cheaper Model Y, a rear-wheel-drive SUV-style crossover, in Canada that is eligible for Canadian government incentives.

Cars eligible for the subsidy on Tesla’s website carry a VIN code that indicates they were made at the company’s Shanghai factory.

A Tesla production plan seen by Reuters shows the automaker has designed and tested Model Y vehicles for export to North America and aims to produce nearly 9,000 for export this quarter. A person briefed on the developments said the Model Y cars would be bound for Canada. The person declined to be named due to the sensitivity of the matter.

It’s unclear what the equivalent target for Model 3 exports to Canada will be.

Reuters reported in November that Tesla had considered a plan to export cars made in China to North America.

After the Reuters report was published, Tesla Chief Executive Elon Musk tweeted that it was “false,” without elaborating.

First published date: May 23, 2023 at 17:49 PM CST


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