Tesla has introduced a more affordable version of its Model 3 in Canada, specifically the Shanghai-built Model 3 RWD Premium, priced at approximately $31,000 USD equivalent. This model, however, remains unavailable to American consumers, highlighting divergent market conditions and trade relationships between the three nations.

The availability of this cheaper Model 3 in Canada is largely attributed to the country's unique trade dynamics with China. While the U.S. imposes higher tariffs on imported Chinese vehicles, Canada has recently adjusted its import policies. Previously, Canada had a 25 percent tariff on U.S.-made products, including automobiles, which made models like the Tesla Model 3 Long Range expensive, nearing $80,000 Canadian (approximately $60,000 USD). A subsequent 100 percent tariff on Chinese-made EVs in 2024 temporarily halted imports. However, a strategic trade deal negotiated in January reduced this tariff to a more manageable 6.1 percent, allowing for the reintroduction of Shanghai-built Teslas.

This new, lower tariff applies to a quota of 49,000 Chinese-made EVs, PHEVs, and range-extended EVs annually, with plans to increase this cap to 70,000 within five years. The Model 3 RWD Premium starts at $39,490 Canadian, which translates to just under $31,000 USD after current exchange rates and including delivery, provided buyers choose the standard Stealth Gray color. Other color options, such as Pearl White and Deep Blue Metallic, add $955, Diamond Black costs $1,469 extra, and Ultra Red and Quicksilver are an additional $1,910. Optional 19-inch Nova Wheels are available for $1,469, and a black-and-white interior for $955. Tesla’s Full Self Driving system is also offered in Canada as a $73-per-month subscription, with a 30-day free trial.

Despite its attractive price point, there is a notable caveat for Canadian buyers: the Shanghai-built Model 3 RWD Premium does not qualify for Canada's $5,000 EV rebate. This is due to the absence of a free-trade agreement between China and Canada, which is a key requirement for the rebate program.

Performance-wise, the Chinese-built Model 3 RWD Premium differs slightly from its American-made counterpart. It offers a range of 288 miles on a single charge, which is less than the 321 miles provided by the U.S.-market car. Charging capabilities also see a minor reduction; Tesla states it can add up to 160 miles in 15 minutes on a 250-kW Supercharger, 10 miles less than the U.S. version, despite the latter having a lower 225-kW charging rate. This difference in performance is attributed to the battery chemistry: the Chinese-built car utilizes lithium iron phosphate (LFP) batteries, while the American-made version employs nickel cobalt manganese (NMC) cells.

This isn't the first instance of Tesla importing Model 3s from China to Canada. The automaker previously did so with both Model 3s and Model Ys, but paused due to the earlier 100 percent tariff. The recent reduction in tariffs marks a renewed strategy to offer more competitive pricing in the Canadian market.