Tesla has launched the Model 3 Premium Rear-Wheel Drive (RWD) in Canada starting at $39,490 CAD. This pricing strategy makes it the most affordable Tesla ever in Canada. The new price significantly undercuts U.S. prices, reflecting Tesla’s response to the competitive Canadian automotive market.
Tesla previously sourced Model 3 vehicles from its Fremont factory in California before switching back to Shanghai production due to tariffs. The shift to Shanghai production allows Tesla to take advantage of a 6.1% tariff on Chinese-built electric vehicles (EVs) in Canada. This strategy positions Tesla favorably against competitors who face higher tariffs on U.S.-made vehicles, which are subject to a 25% counter-tariff.
The Model 3 Performance is now priced at $74,990 CAD, down from $89,990 CAD. The Premium RWD boasts an EPA-estimated range of 463 km and accelerates from 0 to 100 km/h in 4.2 seconds. The new entry-level model is designed for buyers seeking a high-value option without stretching into higher trims.
The removal of the Model 3 Premium Long Range All-Wheel Drive (AWD) from the Canadian lineup reflects Tesla’s focus on streamlining its offerings. First customer deliveries of the new Canadian Model 3 lineup are expected as early as May or June 2026, according to Tesla.
Observers note that this pricing strategy could reshape EV pricing dynamics in Canada. The Premium RWD is now the cheapest Tesla vehicle ever sold in North America, which may attract more buyers into the Tesla ecosystem.
Industry experts suggest that this move could lead to increased competition among EV manufacturers as they respond to Tesla’s aggressive pricing. The change also highlights how tariffs on EVs influence production decisions and market strategies.
Tesla’s shift in sourcing demonstrates a strategic adaptation to external economic factors while aiming to maintain its leadership position in the electric vehicle market.
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