Tesla has lowered the bar for electric vehicle affordability in Canada with the latest Model 3 Premium Rear-Wheel Drive option. Reintroducing its entry-level sedan in Canada, Tesla’s RWD variant for the Model 3 will start at $39,490 CAD, or approximately $29,000. That’s nearly half the price of the previous entry-level price point for a Model 3 in Canada, which started at $79,990 CAD, or around $59,000.

At the higher end, Tesla also reduced the price of its Model 3 Performance for Canadian customers from $89,000 CAD to $74,990 CAD, or around $55,000. To explain the sudden shift, we have to thank Tesla’s global supply chain and the ever-evolving tariff situation across the world. Canadian residents were previously able to buy a Model 3 made in Tesla’s Shanghai factory before 2024, but Canada eventually slapped an additional 100 percent tariff on EVs made in China. In response, Tesla switched to offering EVs built in its Fremont, Calif. factory to Canadian customers. However, following the Trump administration’s tariff campaign, Canada instituted a 25 percent retaliatory tariff on US-made vehicles that led to the $79,990 CAD price tag on the most affordable Model 3 for Canada at the time.

In the latest shift, Canada reduced the tariffs on Chinese-made EVs to just 6.1 percent, allowing for Tesla to once again ship its EVs made in the Giga Shanghai factory into the country for more reasonable prices. It’s important to note that the Model 3 Premium RWD option isn’t currently covered in Canada’s new Electric Vehicle Affordability Program that allows for up to a $5,000 CAD incentive. Although the latest incentive program recently went into effect, the newest Model 3 doesn’t apply since it’s not made in Canada.