Tesla has started selling the Model 3 and Model Y vehicles made in China in Canada, marking the completion of the company’s first batch of shipments from its Shanghai factory to North America. According to Tesla’s website, the rear-wheel-drive Model Y and long-range all-wheel-drive Model 3 are now immediately available for delivery in British Columbia, Canada. Both models qualify for a federal government subsidy of CAD 5,000. However, the exact number of China-made Tesla vehicles available for purchase in Canada, and the number already sold, remain undisclosed.
Cars produced by Tesla’s Shanghai factory for overseas markets could potentially boost the sales of vehicles produced at its California and Texas factories in the U.S. These vehicles qualify for a potential tax benefit of up to USD 7,500 under the U.S. government’s subsidy plan. However, Tesla faces increasing competition in terms of price and features from Chinese electric vehicle manufacturers. Meanwhile, Tesla’s Berlin factory is continuously ramping up the production of Model Y for European customers.
Tesla’s production base in China gives the company a global cost advantage. The China-made Model Y is priced at CAD 61,990 in Canada, which is about 22% higher than equivalent cars’ costs before China introduced preferential policies. However, as Canada does not link electric vehicle subsidies to the location of car production factories, Tesla can export China-made Model 3 and Model Y models to Canada, where they also qualify for subsidies.
The codes Tesla uses when listing vehicles for sale correspond to the first three digits of the Vehicle Identification Number (VIN). The VINs of Tesla models produced in the Shanghai factory begin with the letters “LRW”, indicating that the Model 3 and Model Y sold in Canada are manufactured by Tesla’s Shanghai factory. The sale of Tesla cars in Canada is expected to help expand its share in the North American market, while also providing a new market for China-made Tesla cars.