Tesla is making a desperate move to stay alive in Canada as its sales suffer from the fallout of Donald Trump’s trade war. In a quiet but shocking update to its website, the electric vehicle maker has drastically lowered the price of its best-selling Model Y SUV by a staggering $20,000.
The move is a direct response to a brutal trade dispute that has crippled Tesla’s Canadian operations. In retaliation for tariffs imposed by the Trump administration, Ottawa slapped a 25% surtax on all cars imported from the United States starting on April 9, 2025. Faced with this new cost, Tesla had no choice but to raise the price of a Canadian Model Y to nearly CAD $84,990 (USD $61,500).
The result was catastrophic. According to reports from Electrek, the massive price hike caused demand to completely evaporate, with Tesla’s sales in Canada grinding to a virtual halt in recent months. Tesla, which does not provide sales figures by region and country, saw its overall sales drop by 13.5% in the second quarter compared to a year earlier.
Now, in a bid to reignite sales, Tesla has reversed course. The Model Y Long Range All-Wheel Drive now has a starting price of, according to the company’s website. $64,990, a full $20,000 less than its peak. The likely explanation for this dramatic reversal is a major strategic pivot: the new, cheaper Model Ys are reportedly being imported from Tesla’s Gigafactory in Berlin, Germany, allowing the company to bypass the steep tariffs on U.S.-made vehicles.
While a win for new buyers, the decision has created a ludicrous pricing situation. The prices of other Tesla models, which are still sourced from the U.S., remain inflated by the surcharges. This means the Model Y, a popular SUV, is now significantly cheaper than the Model 3, Tesla’s entry-level sedan. A quick check of Tesla’s Canadian website shows the Model 3 Long Range All-Wheel Drive starting at $70,772, nearly $6,000 more than the larger and more popular SUV.
The sudden price drop was widely discussed by Tesla fans and prospective buyers on X (formerly Twitter), with reactions ranging from shock and excitement to regret for those who bought just a few weeks too early.
“$20,000 Jesus,” one user exclaimed.
$20,000 Jesus — Kevin Melnuk (@KevinMelnuk) July 11, 2025
“Feel bad for those who paid 85K,” said another.
Feel bad for those who paid 85k — Waldo (@curtd13) July 11, 2025
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