Tesla Sells Shanghai-made Model 3 in Canada at Record Low Price
Tesla is selling Chinese-made cars in Canada to escape the tariffs that both China and America imposed on it.
The Deal
May 3, 2026 - TL;DR: Tesla is now offering the Shanghai-made Model 3 sedans in Canada at C$39,490, significantly lower than the previous price of C$79,990 for a Fremont-sourced model. This comes after Prime Minister Carney's January 2026 trade deal with Beijing reduced Chinese EV tariffs from 100% to 6.1% under a quota of 49,000 vehicles.
Tesla is the first company to take advantage of this deal, which also opens the Canadian market to other Chinese EV manufacturers like BYD.
Background
Canada had imposed a 100% surtax on Chinese-made electric vehicles in October 2024, aligning with US tariffs. This was part of a broader technology competition between the two nations, including sectors like semiconductors and AI. Tesla had previously shipped Model 3s from Shanghai to Canada but switched to Fremont after these tariffs were implemented.
The situation became complex when Canada retaliated with its own counter-tariffs on US vehicles in early 2025, making the Fremont-sourced Model 3 unaffordable at C$79,990.
Carney's Visit and Agreement
In January 2026, Prime Minister Carney visited Beijing and signed a "preliminary but landmark" trade agreement. Canada reduced the tariff on Chinese EVs to 6.1%, effective immediately under a quota of 49,000 vehicles for the first half of 2026. This was followed by another allocation of 24,500 vehicles from September to February 2027 and an expansion to 70,000 annually by 2030.
China reciprocated by lowering tariffs on Canadian canola seed from approximately 85% to 15%.