Tesla Clears Model 3 Inventory in Canada Ahead of the Arrival of Chinese EVs: Report

Tesla is already looking to take advantage of lower Canadian tariffs on Chinese EVs. Tesla has reportedly cleared its Model 3 inventory in Canada, and it all stems from President Donald Trump’s tariffs. Electrek and other EV blogs first reported that Tesla appears to have removed its entire inventory of Model 3 vehicles from the Canadian market as the country prepares to start receiving Chinese-built EVs, something Tesla is likely already trying to take advantage of. Gizmodo was unable to find any Model 3 vehicles using Tesla’s online inventory search within 200 kilometers of major Canadian cities, including Vancouver, Toronto, and Montreal. Electrek also reported, citing unnamed sources, that the vehicles that appear to have vanished from the Canadian inventory have been sent back to the United States. Tesla did not immediately respond to a request for comment from Gizmodo. While Tesla has yet to confirm this, the move would make logical sense when you consider the current dynamics of President Donald Trump’s ongoing trade war. In the past, Tesla supplied Model 3 vehicles to Canada from its Chinese factories. But that changed after Canada joined the U.S. in imposing a 100% tariff on Chinese EVs, essentially killing the market for Chinese-made cars in most of North America. In response, Tesla began shipping Model 3 cars to Canada from its factory in California, according to Electrek. Fast-forward a few years, and Trump’s aggressive trade policies toward Canada triggered a 25% retaliatory tariff on some U.S.-made goods, including cars. Tesla was able to work around that tariff with some vehicles, like the Model Y, by sourcing them from its gigafactory in Germany. But there was no easy workaround for the Model 3, so the company raised its price to more than $79,000 in Canada to account for the tariffs. Now, another major shift in global trade policy is underway. The Canadian government recently announced it will allow up to 49,000 Chinese EVs into the country starting in March at a much lower tariff rate of 6.1%. The move is part of a broader strategic partnership between Canada and China announced back in May. In exchange for allowing Chinese EVs into the country, China agreed to reduce tariffs on Canadian canola seed, one of Canada’s major agricultural exports, to a combined rate of roughly 15%, down from 85%. Those changes also took effect this month. The shift has been seen as Canada’s attempt to cozy up to China as it looks to loosen its economic dependence on the United States. Canadian Prime Minister Mark Carney told reporters at the time that while Canada’s relationship with the U.S. is deeper, broader, and more multifaceted than its ties with China, relations with Beijing have improved in recent months and have become “more predictable.” BYD, the world’s largest EV seller, has already registered some of its factories with Canada’s transport regulator. But Electrek reports that Tesla may be in the best position to take advantage of the new policy since many of its Chinese-built vehicles are already listed in Transport Canada’s certification database and could be imported immediately. If that’s the case, the U.S.-built Model 3s were likely shipped back to the United States to avoid tariffs, opening the door for Tesla to sell Chinese-built Model 3s in Canada without a tariff premium. As global trade gets increasingly tangled in tariffs, Tesla seems to be getting pretty good at shuffling cars around the world to wherever the math works best.