Canada’s Entry Tesla Model Y to Come From Giga Shanghai: Report

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  • Tesla begins producing a more affordable Model Y variant in its Shanghai factory for export to the Canadian market.
  • The new Model Y variant is eligible for federal and provincial incentives in Canada, offering up to $12,000 in potential savings.
  • The production in Shanghai has sparked a price war in the EV market and contributed to a decline in Tesla’s first-quarter margin.

Tesla has commenced production of a Model Y electric vehicle (EV) variant in its Shanghai factory, which is set to be exported to the Canadian market, marking the first time Tesla will ship vehicles from China to North America. This revelation came from insider sources and a production memo acquired by Reuters (via Tesla North).

The production move links Tesla’s most cost-efficient factory with its largest market, as the Model Y has become its top-selling model around the world.

Last week, Tesla introduced a more affordable Model Y variant for Canadian customers on its website, priced at $10,000 CAD less than the existing long-range version. The rear-wheel drive crossover is slated for delivery between May and July, starting at $59,990 CAD. The new lower entry price means both the RWD Model Y and Long Range Model Y qualify for federal rebates.

Speculations were rife that the Model Y RWD in Canada would be equipped with the LFP batteries produced at Giga Shanghai, similar to the Model Y RWD in China. Tesla’s Model 3 RWD also uses LFP batteries.

The federal government updated its website last Friday (the update came a bit slow probably due to striking workers), disclosing that both the new and long-range Model Y versions are eligible for incentives of $5,000 CAD on purchase or a four-year lease. Additionally, the more affordable RWD Model Y qualifies for various provincial incentives, which could total up to $12,000 in savings when combined with the federal iZEV rebate.

Tesla began producing the Model Y for the Canadian market in its Shanghai factory earlier this month, targeting nearly 9,000 vehicles for this quarter, say sources. Many experts believe that the build quality of vehicles from Giga Shanghai surpasses that of Tesla’s Fremont, California factory.

Tesla CEO Elon Musk has previously emphasized the Shanghai plant’s “lowest cost structure” among the company’s factories. The new Model Y RWD variant, priced at $59,990 CAD, is less expensive than the entry-level U.S. model, which costs $46,990 USD ($63,617 CAD).

For example, with a $5,000 federal rebate and $7,000 Quebec rebate, the entry Model Y drops to $47,990 CAD. That’s cheaper than the Honda CRV Touring Hybrid, priced at $51,015.

Tesla’s website says taking into account the estimated six years of gas savings of $2,200 per year ($13,200), the Model Y is even more enticing as the price can be $36,782 in Quebec. An entry Honda CRV LX-B 2WD costs $36,365 CAD.

This introduction of a more affordable Model Y has ignited a price war in the EV market and contributed to a decline in Tesla’s first-quarter margin. The price drop has ignited debate within online forums regarding purchasing the Model Y, as qualifications for both federal and provincial rebates has made the vehicle’s final price even more enticing over competitors and gasoline equivalents.