Drops in Tesla vehicle registrations in Canada by 67% during the initial six months of 2025
Tesla, the electric vehicle (EV) giant, is facing a significant drop in sales in Canada, with registrations plummeting 67% year-on-year in the first half of 2025. This decline, according to industry analysts, can be attributed to a combination of factors, including the removal of rebates at both the federal and provincial levels, tariffs imposed by both the US and Canadian governments, and damage to Tesla's brand reputation due to Elon Musk's political statements.
End of EV Incentives
The Canadian government's decision to freeze the Incentive for Zero-Emission Vehicles (iZEV) program in mid-January 2025, which removed a crucial rebate, played a significant role in the drop. The pause in Quebec’s "Roulez Vert" rebate program further reduced incentives in the large EV market province. As a result, Tesla registered only 9,000 units in H1 2025, a stark contrast to the 26,000 units registered in the same period in 2024 [1][2][3].
Tariffs and Trade Disputes
The trade dispute between the US and Canada further complicated Tesla's operations. The Trump Administration reimposed tariffs (up to 35%) on Canadian goods, and Canada responded with a 25% surtax on passenger cars and light trucks from the US starting April 2025. In an effort to mitigate the impact of these tariffs, Tesla resorted to importing Model Ys from Germany, which led to a significant price drop of about CAD 20,000 for the Model Y. However, sales remained low [1][4].
Brand Reputation Issues
Elon Musk’s public political stances, including backing Trump and controversial comments about Canada, such as "Canada is not a real country," have negatively impacted Tesla’s image among Canadian consumers. These statements have undoubtedly contributed to the sales slump [1][2][3].
Wider EV Market Decline
It's important to note that the overall EV market in Canada also experienced a downturn in early 2025, with registrations dropping 32%. Tesla's sales difficulties, therefore, were partly part of a broader market downturn exacerbated by policy changes [2][3].
In the coming weeks, the Canadian government is expected to respond to the tariffs, which could potentially include additional tariffs on auto parts or automobiles. The response from the Canadian government should provide some clarity on the future of Tesla's operations in the country.
[1] Tesla Faces 67% Sales Drop in Canada
[2] Canada's EV Market Struggles Amid Tariffs and Rebate Cuts
[3] Tesla's Brand Reputation Takes a Hit in Canada
[4] Tesla Imports Model Y from Germany to Avoid Tariffs
- The Canadian government's decision to freeze the Incentive for Zero-Emission Vehicles (iZEV) program and the pause in Quebec’s "Roulez Vert" rebate program significantly reduced incentives for electric vehicle (EV) buyers in Canada, contributing to a drop in sales for companies like Tesla.
- Tesla's sales struggle in Canada might also be related to Elon Musk's political statements, affecting the company's reputation among Canadian consumers, as some of his public comments about Canada have been perceived as controversial.
