Tesla launches Model 3 RWD in Canada at record-low $39,490 ($29,000 USD) from China

Tesla has launched a new Model 3 Premium RWD trim in Canada starting at just $39,490 CAD — a record-low price for the electric sedan in the country. The price, which converts to roughly $29,000 USD, is made possible by sourcing the vehicle from Giga Shanghai instead of Fremont, California.

The move marks the first time Tesla is selling China-made vehicles in Canada since the country imposed a 100% tariff on Chinese EVs back in 2024 — and it creates a massive price gap with the Model 3 Performance.

From Fremont to Shanghai and back again

Tesla’s Canadian Model 3 supply chain has been on quite a ride over the past two years. Before late 2024, Tesla supplied Canada with Shanghai-built Model 3 vehicles. When Canada imposed a 100% surtax on Chinese-made EVs, Tesla switched to sourcing from its Fremont factory in California.

That arrangement became untenable when Canada slapped 25% counter-tariffs on US-made vehicles in early 2025, pushing the Model 3 Long Range AWD to a staggering $79,990 CAD. As we reported in March, Tesla responded by shipping its remaining US-built Canadian Model 3 inventory back to the United States, clearing the deck for Shanghai-built replacements.

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The catalyst was the tariff deal Prime Minister Mark Carney struck with Beijing in January, which slashed the duty on Chinese-made EVs from 100% to just 6.1% — the standard most-favored-nation rate — under a quota of 49,000 vehicles per year.

Tesla is now the first automaker to capitalize on that deal with actual product in the Canadian market.

The new Canadian Model 3 lineup

The new Model 3 Premium RWD starts at $39,490 CAD and delivers 463 km of range with a 0-100 km/h time of 4.2 seconds. Tesla also cut the Model 3 Performance price by 17% to $74,990 CAD, down from $89,990.

The price difference between the two trims is now $35,500 — nearly double the base price of the Premium RWD. The Performance delivers 478 km of range, a 3.1-second 0-100 km/h sprint, and a 262 km/h top speed.

Here’s how the two trims compare:

For most buyers, the Premium RWD at $39,490 offers the better value. You get nearly identical range, solid acceleration, and a price that undercuts virtually every comparable EV in Canada. Paying $35,500 more for a 1.1-second improvement in sprint time and AWD is a tough sell for all but the most performance-focused buyers.

Canada vs. US pricing confirms the Shanghai shift

Comparing Canadian prices against the US lineup at today’s exchange rate of 1.357 CAD/USD tells the story:

The Premium RWD is a staggering 31% cheaper in Canada than in the United States — a gap that can only be explained by the shift to Giga Shanghai, where production costs are significantly lower than Fremont, and the 6.1% Canadian tariff is a fraction of what US buyers effectively pay for their domestically-built units.

Meanwhile, the Performance is priced nearly identically in both countries when converted to USD. That strongly suggests the Performance is still sourced from Fremont — with the 25% counter-tariff on US-made vehicles largely offsetting any savings Tesla might pass along.

Tesla removed the Model 3 Premium Long Range AWD from the Canadian lineup entirely, which had been priced at $79,990.

The catch: no federal rebate

There’s an important caveat for Canadian buyers. Shanghai-built Model 3 vehicles do not qualify for Canada’s $5,000 Electric Vehicle Affordability Program (EVAP) rebate, which requires vehicles to be manufactured in a country with which Canada has a free-trade agreement. China doesn’t meet that requirement.

That effectively brings the out-of-pocket cost to $39,490 for the Premium RWD — still a record low, but $5,000 more than it would be if the same vehicle qualified for the incentive. For comparison, competitors like the Hyundai Ioniq 5 and Chevrolet Equinox EV do qualify for the EVAP rebate, narrowing the effective price gap.

First customer deliveries on new orders of the new Canadian Model 3 lineup are expected as early as May or June 2026.

A wider opening for Chinese EVs in Canada

Tesla won’t be alone in capitalizing on the 6.1% tariff for long. BYD is already planning 20 Canadian dealerships within a year, with Toronto as its first market. The 49,000-unit annual quota will grow to 70,000 by 2030, and by that year, half of the imported vehicles must cost less than $35,000 CAD.

Tesla has the first-mover advantage with existing retail infrastructure, service centers, and Supercharger network across Canada. But as more Chinese-built EVs arrive — including from BYD, which builds its own vehicles in China — the competitive landscape will shift quickly.

Electrek’s Take

This is a genuinely significant move by Tesla for the Canadian market. A $39,490 Model 3 is cheaper than the vehicle has ever been in Canada, and it’s competitive with mainstream ICE sedans on price alone.

The irony is that Canadian consumers are now getting a better deal on a Tesla than American buyers. At ~$29,100 USD equivalent, this Model 3 Premium RWD is 31% cheaper than the same trim in the US at $42,490 USD — a $13,390 gap.

Meanwhile, the Performance is priced nearly identically in both markets when converted, which all but confirms it’s still rolling off the Fremont line while the Premium RWD comes from Shanghai. That’s the direct result of Canada breaking with Washington on China trade policy — a move we argued for when Ottawa was considering matching the 100% US tariff.

The $35,500 gap between the Premium RWD and Performance is jarring, though.

Who is going to buy a Performance when you can get basically get two Premium RWDs for the same price? I guess it’s the only way to have an AWD now, but that’s a lot of money for dual motors and faster acceleration.