Decline in Tesla vehicle registrations in Canada by 67% during the initial half of 2025
Tesla's sales in Canada have taken a significant hit in 2025, with new registrations dropping by a staggering 67% year-on-year. This decline can be attributed to a combination of factors, including the removal of federal and provincial EV subsidies, tariff barriers, and damage to Tesla’s brand image caused by Elon Musk's controversial statements.
The nationwide iZEV rebates and provincial bonuses in British Columbia and Québec, two leading EV adoption provinces, were removed, substantially reducing the affordability incentives for Tesla buyers. Canada imposes a 100% import tariff on Chinese electric vehicles, and the U.S. introduced a 35% tariff on Canadian goods, both pushing up costs either directly or through trade tensions.
Elon Musk's comment that "Canada is not a real country" has significantly hurt Tesla’s brand trust in Canada, creating a social backlash that impacts consumer sentiment and sales. In response, Tesla announced a $20,000 CAD price cut on the Model Y, bringing its price below pre-tariff levels to make it more competitive.
The lower price of the Model Y is due to Tesla importing the vehicles from Germany to avoid tariffs. Meanwhile, competing automakers like General Motors have experienced substantial sales growth in Canada, putting additional pressure on Tesla’s market share.
Tesla must pursue further measures such as tariff negotiations, subsidy reinstatement, and reputation rebuilding to recover. The Canadian government's response to the tariffs, including potential tariffs on auto parts or automobiles, is expected in the next few weeks.
In summary, the steep decline in Tesla sales in Canada in 2025 is due to policy changes removing subsidies, tariff-induced price inflation, and lasting negative brand impact from Musk’s statements, combined with strong competition in the EV market. Whether Tesla can win over Canadian consumers in the near future remains uncertain.
- The removal of iZEV rebates and provincial bonuses in British Columbia and Québec, two leading EV adoption provinces, and the 100% import tariff on Chinese electric vehicles in Canada have significantly increased the cost of Tesla vehicles, making them less competitive in the finance and transportation industry.
- Elon Musk's controversial statements, including his comment that "Canada is not a real country," have damaged Tesla's business and technology image, negatively impacting the automotive industry and causing a social backlash that has affected consumer sentiment and sales.
- General Motors, a competing automaker, has experienced substantial sales growth in Canada, putting additional pressure on Tesla's market share in the industry and highlighting the need for Tesla to pursue further measures, such as tariff negotiations, subsidy reinstatement, and reputation rebuilding, to recover and remain competitive.
