The Tesla Model 3 price increases now make it ineligible for EV subsidies in markets like Canada

The global chip shortages and supply chain problems are affecting Tesla as much as any other car maker. Perhaps more, considering the hardware and software that goes into one of its electric cars. Recently, it shipped vehicles without the USB charging paraphernalia promised in the cars' specification sheet in the US, indicating how desperate the supply chain problems are. While it will be retrofitting said port-less vehicles as soon as the delivery of the parts, Tesla's sales may be affected by something much more sinister - price increases.

The Tesla Model 3 and Model Y prices have been rising across the board globally, in places as disparate as China, the US, or Canada. China saw two price bumps, with the latest bringing the Model 3 tag up by 1.9% and the Model Y price by 1.7%. That's on top of the 6.4% Model 3 price increase that Tesla announced in China just six days ago. While it hasn't yet shipped cars with gaping holes instead of USB chargers out of its Shanghai factory, Tesla did clarify that the ports in the central console of the Model 3 and Model Y can't be used for data transfer now due to the lack of the necessary chips, just for charging.

Moving on to Canada, the result of the Tesla Model 3 price bump is that even the basic model can't qualify for the government's generous CAD$5,000 incentive there. The cheapest, RWD Model 3, went from CAD$54,490 to CAD$59,990, as you can see in our screenshot below. That made it ineligible for the federal EV subsidy, as it only applies to electric cars priced below CAD$55,000. In some provinces like British Columbia, the base Tesla Model 3 now doesn't even qualify for the local, provincial subsidies, adding another CAD$5,000 insult to the government subsidy injury. All in all, the global supply chain problems with chip shortages and the resulting Tesla car price increases will demonstrate for its CEO Elon Musk exactly how elastic the demand for the Model 3 is without government largesse.

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