Tesla cut prices across its Model 3 lineup in Canada on Friday, with the new Premium Rear-Wheel Drive variant starting at C$39,490 — operationalizing the China-Canada supply chain shift reported by EV in March.

The new entry-level Model 3 in the Canadian market becomes the cheapest Tesla vehicle ever sold in the North American market.​​​​​​​​​​​​​​​​

The price cuts come as Tesla imports the Canadian Model 3 supply from its Shanghai factory rather than its Fremont, California plant — a move that takes advantage of Canada’s 6.1% most-favored-nation tariff rate on Chinese-built electric vehicles under the country’s new EV import quota.

Tesla North America announced the new pricing in a post on X on Friday afternoon, calling the Premium RWD “the most affordable it’s ever been.”

The Model 3 Premium RWD has an EPA-estimated range of 463 kilometers and accelerates from 0 to 100 kilometers per hour in 4.2 seconds.

Tesla said first customer deliveries of the new Canadian Model 3 lineup are expected as early as May or June.

Tesla also cut the Model 3 Performance trim by approximately 17% to C$74,990 from C$89,990 — a C$15,000 reduction.

The Performance variant has an EPA-estimated range of 505 kilometers, a top speed of 262 km/h, and accelerates from 0 to 100 km/h in 3.1 seconds.

The mid-range Long Range trim, previously priced at C$79,990, has been discontinued from Tesla‘s Canadian lineup.

The new two-trim structure means the Premium RWD becomes the new entry point at roughly half the price of the discontinued Long Range — a 50.6% reduction in the entry price for a Canadian Model 3.

The “starts at” pricing displayed in Tesla North America’s promotional post was C$42,132, with the difference from the C$39,490 base reflecting standard destination and delivery charges.

The Shanghai-built Model 3 variants are not eligible for Canada’s federal Electric Vehicle Availability Program (EVAP) rebate, which provides up to $5,000 CAD on qualifying purchases.

The exclusion stems from the program’s country-of-origin and trade-agreement requirements, which extend rebate eligibility only to vehicles manufactured at facilities meeting Canadian content and free-trade-agreement standards.

The ineligibility creates a competitive trade-off in the Canadian EV market.

Domestic and Korean or Japanese-made EVs that qualify for the federal rebate become effectively cheaper for rebate-eligible buyers despite higher sticker prices.

For consumers who do not qualify for the rebate or weight sticker price more heavily, Tesla‘s pricing wins outright.

The new federal rebate program reformed in March 2026 made the Model Y available from under C$45,000 for rebate-eligible buyers, as EV reported at the time — though that pricing also depended on facility-of-origin requirements that may not extend to Shanghai-made vehicles.

The Friday price cuts mark the operational execution of the strategy on March 2.

Tesla had previously removed the Model 3 from its Canadian configurator and was directing potential buyers to remaining inventory units only.

A Reddit user visiting a Tesla showroom at the time reported that the company had “quietly removed all the demos and new inventory from their lots and shipping them back to the USA.”

The supply chain repositioning had two strategic motivations.

It allowed Tesla to claim slots under Canada’s new 49,000-unit annual quota for Chinese-built EVs at the 6.1% tariff rate — substantially lower than the 25% Section 232 national security tariff applied to US-made vehicles entering Canada.

It also positioned Tesla ahead of all three Chinese-headquartered automakers — BYD, Chery, and Geely — that have been confirmed for Canadian market entry by year-end.

Canada began accepting import permits for Chinese-built EVs on March 1, 2026, advancing an agreement with Beijing reached six weeks earlier.

Global Affairs Canada is awarding permits for up to 24,500 China-made vehicles entering the country from March 1 through August 31 on a first-come, first-served basis.

A second allocation of 24,500 vehicles, plus any unused first-half permits, covers September 1, 2026 through February 28, 2027.

The quota will expand to 70,000 vehicles annually by 2030.

The 6.1% tariff rate replaces the 106.1% punitive duty Canada had imposed on Chinese EVs in 2024.

Tesla, Volvo, and Polestar — all of which manufacture in China and hold existing Canadian regulatory approvals — were widely viewed as the likeliest first movers under the quota, given their established Canadian distribution networks and Chinese export-spec production capacity.

The Canadian Auto Workers’ union and Conservative leader Pierre Poilievre have both opposed the Chinese EV quota, with Poilievre pledging to scrap the program if elected, citing both domestic manufacturing concerns and cybersecurity risks tied to Chinese-built connected vehicles.