Tesla takes a desperate turn in Canada as its sales plummet alarmingly
Tesla is facing a crisis in Canada. Amid trade wars and a alarming drop in sales, the American automaker has made a drastic decision: to lower the price of its best-selling SUV by over $20,000. What appears to be a victory for new buyers also reflects a warning sign for the future of the brand in international markets.
### The casualties of the trade war
Tesla’s decision comes in the midst of a tense trade dispute. In response to tariffs imposed by the Trump administration, the Canadian government applied a 25% surcharge to all vehicles imported from the United States starting on April 9, 2025. This forced Tesla to increase the price of the Model Y in Canada to CAD $84,990 (approximately USD $61,500), which turned out to be disastrous.
According to the specialized media, the price hike obliterated demand, causing Tesla’s sales in the country to virtually come to a standstill. While the company does not disclose country-specific data, its global sales dropped by 13.5% in the second quarter compared to the same period the previous year.
### A drastic and unexpected response
Faced with the crisis, Tesla decided to take action. Without prior notice, it updated its Canadian website with a significant price reduction: the Model Y Long Range with all-wheel drive now starts at CAD $64,990, a drop of CAD $20,000 from the recent peak.
The reason behind this move? Sources indicate that Tesla is now importing units of the Model Y from its Gigafactory in Berlin, Germany, allowing it to bypass the tariffs applied to cars manufactured in the U.S.
### A perplexing strategy
While the measure benefits those who were waiting to buy, it has also led to an absurd distortion in prices. Other models, like the Model 3, are still being imported from the U.S. and maintain inflated prices due to tariffs. Thus, the larger and more popular Model Y now costs less than the Model 3, which is the entry-level model.
On the Canadian Tesla website, the Model 3 Long Range with all-wheel drive is listed at , nearly CAD $6,000 more than the Model Y, despite being a smaller and less versatile vehicle.
### Divided reactions on social media
The sudden price drop sparked a wave of comments on social media platforms like X (formerly Twitter). While some celebrated the opportunity to buy at a lower price, others expressed frustration for having purchased recently at higher prices.
“20,000… Jesus,” wrote one incredulous user.
“Poor those who paid 85K,” commented another.
“The model 3 is 79,990, the model y is 64,990. I wonder what they wanna sell 😆,” quipped a third.
“Great! Ordering it tomorrow!” exclaimed another.
### Why this move is crucial
The situation reflects Tesla’s growing vulnerability in an increasingly competitive market, with changing regulations and less predictable demand. It also exposes the erratic pricing approach during the Musk era, which has made buying a Tesla as volatile and unpredictable as investing in cryptocurrencies.
For Canadian consumers, this may be a unique opportunity. But for Tesla, it is a warning sign: its dominance in the global electric vehicle market may be starting to fade.
