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
One user pointed out the strange new pricing dynamic: “The Model 3 is 79,990 The Model Y is 64,990 I wonder what they want to sell.”
The model 3 is 79,990
The model y is 64,990I wonder what they wanna sell 😆
— PlentyofZero (@random01097463) July 11, 2025
But for those who waited, the news was cause for celebration. “Awesome! Ordering one tomorrow!” another rejoiced.
Awesome ! Ordering one tomorrow !
— K C 189 (@kennystjohns) July 11, 2025
Why It Matters
The move highlights Tesla's growing vulnerability in global markets as it faces mounting pressure from trade policies, intensifying EV competition, and erratic demand. It also underscores the unpredictability of Musk-era pricing, which has made buying a Tesla feel more like buying crypto: volatile, emotional, and occasionally rewarding.
For Canadian consumers, it may be a chance to score a deal. But for Tesla, it's a signal that its grip on global EV dominance may be slipping.
