One of the most significant developments for EV purchasers in Canada is that Tesla has reduced the price of the Model Y Long Range AWD by a substantial amount: $20,000. The fully electric crossover SUV has been made available at the pre-tariff price of $64,990 CAD, which will help kick-start the interest in the competitive EV market.
This significant pricing reduction occurred only after a couple of months, following Canada’s imposition of tariffs on electric vehicles manufactured in China, which caused the Tesla price to surge. This was because the Model Y, which was being offered for $84,990 CAD, was no longer affordable to middle-income consumers, and it could not receive federal and provincial EV rebates due to its artificially high pricing.
The Model Y can once again be eligible for some regional incentive schemes with the new pricing, but rebates are not guaranteed depending on vehicle specifications and which aspect of the country they are applied within.
A Strategic Reversal
This move by Tesla to reduce prices is a strategic shift. Tesla Model Y is the best-selling car in the world today, which has also become a pillar of the Tesla business brought about by its North American operations. The recent price rise had led to a visible slump in demand, said market analysts and anecdotal accounts in the showrooms of Tesla. Tesla sales have collapsed by more than 85% in Canada, according to Quebec Reports.
Industry observers suppose that this U-turn may be caused by weakening performance in sales and by growing competition from both longstanding car companies and newer EV companies. “Even Tesla understands that it has to keep up with the market, with the influx of EV models available at a relatively cheaper price,” adds auto analyst Jennifer Li of EV Market Watch. This rollback will not occur only for $20,000 because of adjustments to tie-in tariffs, but to regain market share.
BREAKING: @Tesla has reduced Model Y prices in Canada 🇨🇦 by $20,000, bringing it back to pre-tariff levels.
Only the Long Range AWD available to order for $64,990, down from $84,990.
Also, Diamond Black paint is now available as a $2,000 option. pic.twitter.com/bcHrWiWgQ3
— Drive Tesla 🇨🇦 (@DriveTeslaca) July 11, 2025
Restricted Setting: Terms at Long Distance AWD
The current model of a Model Y, which can be ordered in Canada, is a Long Range All-Wheel Drive (AWD). The decision streamlines Tesla products in the region and would be a form of cost-efficiency, with the company making changes in the supply chain.
The Long Range AWD model can reach a top range of up to 526 kilometers with a full battery, 0-100km/h acceleration time of 4.8 seconds, and dual-motor AWD, making it an interesting prospect to Canadians who have to cover great distances and have to endure winters.
The Performance and Standard Range models are, however, no longer available to order, and there is no announced date when they will make a comeback. Tesla has made no indication on the short and long-term nature of the move.
New Coloured Black Paint Choice
In conjunction with pricing-related news, Tesla has also introduced a new high-end paint choice: Diamond Black. The finish can be ordered on top of an extra $2,000 CAD and substitutes Midnight Silver Metallic as the dark color choice of premium paint options in the Model Y line.
Diamond black has burled glossy finish and metallic shine that is intended to complement the shape and curves of the Model Y. Tesla enthusiasts and potential customers have already shared renderings and showroom images of the new shade to social media, and its high-end look, as well as resistance to collection of visible dirt, has been applauded.
What Does This Imply for the Market?
In Canada, the price war launched by Tesla may touch the automotive industry. Competitors such as Ford, Hyundai, and Volkswagen, which have overtaken Tesla in European sales, have already introduced or will introduce new electric SUVs and may now face increased pressure to adjust their pricing strategies. The Model Y, which has a long range, well-tested software capabilities, and the possibility to use the Tesla supercharger network, is difficult to compete against.
The winners are the consumers. The Model Y will be more affordable to more people, and it includes others who would have been tempted to make the transition to EVs but failed because of the sustained rise in prices.
