Big Model Y price cut shows how Tesla plans to go around Canada tariffs as delivery times extend to September

Tesla has dropped the Model Y price by the whopping CA$20,000 up in Canada, bringing it down from CA$84,990, or 62,025 US dollars, to CA$64,990. For comparison, the same Model Y Long Range RWD variant starts from $48,990 in the US, a price that is more than 20% lower.

At the same time, that huge Model Y price cut has come with a drastically extended delivery window. The Model Y delivery wait times have now gone from a few weeks all the way to the September-October period. As if to compensate for the wait, Tesla has introduced its new Diamond Black paint, previously a US-exclusive, as a Model Y color in Canada, too.

The amount of the Model Y price drop and the delivery window extension by several months shows what may be at play, tariffs. The 25% reciprocal tariff that Canada put on goods made in the US after the Trump administration placed the same levy on its own imports, is precisely the amount by which the Tesla vehicle prices had to increase with in Canada back in May when it went into effect.

Since then, Tesla has been coasting along, selling inventory vehicles at pre-tariff prices, but that loophole is quickly closing, and it is now facing a reckoning. The double whammy of a drastic 25% Model Y price increase due to tariffs, and Elon Musk's political activism that remains rather unpopular in Canada, has resulted in a nosedive in sales there.

In order to restore a bit of that market, Tesla is likely planning to import Model Y units from a factory whose production will only be burdened with transportation costs, rather than prohibitive import levies. This leaves the Gigafactory in Berlin that only makes Tesla Model Ys, as the only viable option to go around the tariff conundrum in Canada.

European auto imports in Canada aren't facing tariffs, as the Canadians signed a comprehensive CETA trade agreement with the EU not long ago. The production of the Giga Shanghai factory, that Tesla used to import from before, is now facing 100% tariffs in Canada, while that from Giga Texas or Fremont undergoes a 25% surcharge as a reciprocal tariff.

The Trump administration is now informing it will raise that tariff to 35%, and then with another 35% if reciprocal action is enforced by Canada, which would make importing from the US even more pointless.

This explains how Tesla got around to the idea of importing to Canada from Europe to go around the newly built tariff wall, and why Canadian customers will now have to wait for months on a new Model Y before it starts building a more solid inventory and delivery wait times drop.