Canada’s transport agency’s EV incentive program mandates that a base model for an SUV has to be under C$60,000 to qualify for the subsidy of up to C$5,000. Higher cost variants are then also eligible at a price of up to C$70,000.
The introduction of the cheaper Model Y for Canada qualified both it and Tesla’s C$69,900 long-range Model Y for the incentive as of Friday, Transport Canada said on its website.
Tesla’s Shanghai plant uses lithium-iron phosphate (LFP) batteries for the Model Y version produced there for sale in China and for export to Europe and other markets.
At its factories in Texas and California, Tesla has been rolling out a more powerful battery configuration known as 4680.
Tesla’s website shows the new, Canada-specific version of the Model Y has an EPA-rated range equivalent to 245 miles (394 km) on a charge. The U.S. version of the entry-level Model Y, which has all-wheel drive, has an EPA-rated range of 279 miles.
The new Model Y for Canada is also cheaper than the entry-level U.S. model – $44,275 versus the current price of $46,990 for the U.S.
Tesla has cut U.S. prices on Model Y variants three times since the start of the year, part of a discounting strategy to drive volume that sliced into its first quarter margin and touched off a price war on EVs.
It shipped more than 271,000 Model Y and Model 3 sedans from its Shanghai factory last year to Europe and other markets, roughly a fifth of its global sales.
Tesla is not alone in exporting EVs from China. Renault exports the Spring, an entry-level hatchback EV to Europe under its Dacia brand. BMW exports the iX3 from China to Southeast Asia and Europe.
China’s overall car exports grew four-fold between 2020 and 2022 to top two million vehicles and are on track to top three million this year if the first-quarter pace is sustained.