Tesla in Canada to sell electric cars made in China

Tesla is listing China-made Model 3 and Model Y models for sale in Canada, the company’s website showed on Tuesday, confirming the electric car maker has completed its first shipments to North America from its Shanghai factory. Tesla’s website showed both rear-wheel drive Model Y vehicles and the long-range, all-wheel drive version of the Model 3 available for immediate delivery in British Columbia, with codes showing they were manufactured at Tesla’s Gigafactory Shanghai.

Both models qualify for federal incentives of C$5,000 ($3,700) in Canada, which, unlike the United States, does not link electric-vehicle subsidies to the location of the plant that made the car.

Tesla representatives in China and at the company's headquarters in the United States did not immediately respond to requests for comment.

The company and other electric car manufacturers have a cost advantage in China as exports from that market boom. The China-made version of the Model Y was listed for C$61,990 in Canada. That is about 22% more than the equivalent vehicle costs in China before incentives.

Tesla's move to export to Canada from Shanghai could help it keep vehicles made at its plants in California and Texas for sale in the United States, where they qualify for potential tax incentives of up to $7,500 under the Biden administration’s subsidy program.

It also opens a new market for Tesla Shanghai, which last year accounted for more than half of the company’s production.

Tesla’s Shanghai factory manufactures EVs for sale in China and exports to overseas markets, including Europe. But Tesla faces growing competition on price and features from EV makers in China, and its Berlin factory has been ramping up output of the Model Y for customers in Europe.

Tesla uses a code when listing vehicles for sale that corresponds to the first three digits of the vehicle identification number, or VIN. The VINs for Tesla models built by the Shanghai factory all start with the letters “LRW."

It was not clear how many China-made, Tesla vehicles were available for purchase in Canada or how many had been sold.

Tesla said last month that it would offer a new, cheaper version of its Model Y in Canada, a rear-wheel drive variant of the SUV-styled crossover that would qualify for Canadian government incentives.

The cars qualifying for that subsidy on Tesla’s website carry a VIN code showing they were built by the company’s Shanghai factory.

A Tesla production plan reviewed by Reuters showed the automaker had designed and tested Model Y vehicles for export to North America, with a target of producing nearly 9,000 for export this quarter. A person with knowledge of the development said those Model Y cars were bound for Canada. The person declined to be identified because of the sensitivity of the matter.

It was not immediately clear what the equivalent target was for exports to Canada for the Model 3.

Reuters had reported in November Tesla had considered plans for exporting made-in-China vehicles to North America.

After the Reuters report was published, Tesla CEO Elon Musk, in a Twitter post, had said “False," without elaborating.