Canadian Cuts help Tesla
Tesla has made a bold move in Canada - cutting prices on their vehicle line for the northern country by as much as 21 percent - in order to hit the threshold for some pivotal government incentives.
Tesla has been really focusing on the Americas over the last year - as planning for new facilities, hiring, and lobbying of governments seems to have been focused in the US, Mexico, and Canada for most of 2022, and onwards.
The biggest reason for the push is that all three of those countries are committing to projects and legislation that offers incentives to green energy companies - especially electric vehicle manufacturers. The most notable of these is the American Inflation Reduction Act - which represents one of the largest investments in Green infrastructure on the continent.
Canada’s got it’s own array of Green Energy programs, of course, and the one Tesla was trying to qualify for was the iZEV incentive - a program that offers some relief to the buyer when purchasing a new electric vehicle that meets all of Canada’s criteria. It also gives some nice tax write-offs for the businesses that sell EVs, which is what Tesla wants from this deal.
There are a couple of incentive ranges in the iZEV, and of course, Tesla wanted to get their Model 3 on the most strict one - the $5000 bracket.
All of Tesla’s vehicles meet the requirements for the $5000 incentive bracket - they’re all battery-electric, and have a range greater than 50km on a charge. They also meet Canada’s Motor Vehicle Safety Standards, and are able to drive on highways. What Tesla needed to do was make sure that the Model 3 had a base Suggested Retail Price of less than $55,000 CAD.
These price cuts do that - barely.
If you go to buy a Tesla off the site now, you’ll see that a bare-bones, Rear-Wheel Drive Model 3 comes in at $54,990 CAD before all the other fees for transportation and taxes are added. This means that people buying that Model 3 will get $5000 off their new car, and Tesla will get a nice tax break.
But while the Model 3 is the only vehicle in Tesla’s line up that now qualifies for the iZEV, it’s not the only one that got price cuts.
The Model Y, Model S and Model X all saw price cuts for their variants, ranging from 10% to 21%.
Those are some pretty big cuts, but it looks like Tesla’s doing this basically everywhere. China saw some cuts around New Years, and there have been some big cuts to the vehicles in the American market too.
It’s clear that at least for the Model 3, the price cut was to score that tax break from the incentive program - but given that we know Tesla has a huge year ahead of them in terms of production and new models, and new facilities - this seems like a pretty savvy move to boost sales so they can support all this growth.
Whatever the reason, if you’ve ever wanted a Tesla, now would be the best time to grab one.