Electrek and other EV blogs were first to report 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-made EVs, which Tesla is 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, citing unnamed sources, also reported that the vehicles that were missing from the Canadian list have been shipped back to the United States. Tesla did not immediately respond to Gizmodo’s request for comment.
Although Tesla has not yet confirmed this, the move would logically make sense when you consider the current dynamics of President Donald Trump’s ongoing trade war.
In the past, Tesla has supplied Model 3 vehicles to Canada from its Chinese factories. But that changed after Canada joined the US in imposing 100% tariffs on Chinese EVs, eliminating the market for Chinese-made cars in much 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 towards Canada triggered a 25% retaliatory tariff on some American-made goods, including cars. Tesla was able to work around that tariff with some vehicles, like the Model Y, by sourcing from its Gigafactory in Germany. But there was no easy solution for the Model 3, so the company raised its price in Canada to more than $79,000 to account for the tariffs.
Now, another major shift in global trade policy is underway.
The Canadian government recently announced that it will allow 49,000 Chinese EVs into the country starting in March at a very low tariff rate of 6.1%.
The move is part of a broader strategic partnership between Canada and China announced 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, from 85% to a combined rate of about 15%. Those changes also took effect this month.
The change has been seen as Canada’s effort to catch up with China as it seeks to reduce its economic dependence on the United States.
Canadian Prime Minister Mark Carney told reporters at the time that while Canada’s relationship with the US is deeper, broader and more multifaceted than relations with China, relations with Beijing have improved in recent months and 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 because many of its Chinese-made vehicles are already listed in Transport Canada’s certification database and can be imported immediately.
If that’s the case, US-made Model 3s were shipped back to the United States to avoid tariffs, opening the door for Tesla to sell Chinese-made Model 3s in Canada without the tariff premium.
As global trade becomes entangled in tariffs, Tesla is getting very good at moving cars around the world wherever the math works best.
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