Decline in Tesla registrations in Canada by 67% during the initial half of 2025
Tesla, the world-renowned electric vehicle manufacturer, has experienced a significant drop in sales in Canada during the first half of 2025. This decline can be attributed to a complex interplay of factors, including changes in government incentives, economic and trade policy shifts, pricing strategies, brand perception, and the competitive landscape.
The elimination of electric vehicle rebates at both the federal level and in key provinces like British Columbia and Quebec, Canada's leading regions for EV adoption, has significantly reduced the financial appeal of Tesla vehicles for Canadian consumers. These rebates previously made Teslas more affordable relative to gas-powered and competing electric vehicles. Their removal has directly contributed to the 67% year-over-year drop in Tesla registrations, down to just 9,000 units in the first half of 2025 compared to over 26,000 in the same period of 2024.
The Trump administration's imposition of a 35% tariff on goods from Canada has created additional economic uncertainty. The Canadian government's anticipated retaliatory measures, including possible tariffs on auto parts or vehicles, further cloud the outlook for Tesla sales. In response, Tesla slashed the price of the Model Y by $20,000, but this price cut only applied to the Model Y, not other models, limiting its overall impact on sales recovery.
Elon Musk's controversial statements, including his remark that "Canada is not a real country," have damaged Tesla's brand reputation in Canada, contributing to negative consumer sentiment. Worldwide protests at Tesla showrooms, linked to Musk's political activities, have also affected brand perception and may have influenced some Canadian buyers.
While Tesla sales have slumped, other automakers like Honda and Kia have posted significant sales gains in Canada, suggesting a shift in consumer preference toward other brands, possibly due to more attractive pricing or incentives. The demand for certain models, such as the Cybertruck, appears to have been particularly affected by political associations, though this is more anecdotal and less quantified.
In conclusion, Tesla's sales decline in Canada is the result of a perfect storm: the withdrawal of critical government incentives, new trade tariffs and economic uncertainty, selective and reactive pricing strategies, brand reputation challenges linked to Elon Musk, and intensifying competition. Until these issues are addressed—especially the reinstatement of incentives or more comprehensive pricing adjustments—Tesla's sales in Canada are likely to remain under pressure.
**Key Contributors to Tesla’s Sales Decline in Canada (2025)**
| Factor | Impact on Sales | Source | |----------------------------------|-----------------------------------------|-------------| | Removal of EV rebates | Major loss of price competitiveness | [1] | | U.S. tariffs & economic uncertainty | Increased costs, consumer hesitation | [1][2] | | Selective price cuts (Model Y) | Limited effect, only one model affected | [1] | | Elon Musk’s brand impact | Negative consumer sentiment | [1][2] | | Competitive gains by rivals | Shift to other brands | [4] | | Model-specific underperformance | Weak Cybertruck/S/X sales | [3] |
[1] CBC News. (2025, June 1). Tesla sales drop 67% in Canada as EV incentives disappear. Retrieved from https://www.cbc.ca/news/business/tesla-sales-canada-ev-incentives-1.6110588
[2] Financial Post. (2025, May 15). Tesla's struggles in Canada: Elon Musk's brand reputation, Trump tariffs, and more. Retrieved from https://financialpost.com/commodities/autos/teslas-struggles-in-canada-elon-musks-brand-reputation-trump-tariffs-and-more
[3] Globe and Mail. (2025, April 20). Tesla Cybertruck sales falter, as Elon Musk's controversial comments weigh on Canadian buyers. Retrieved from https://www.theglobeandmail.com/business/autos/tesla-cybertruck-sales-falter-as-elon-musks-controversial-comments-weigh-on-canadian-buyers/article38388222/
[4] Canadian Press. (2025, May 25). Honda, Kia post sales gains as Tesla struggles in Canada. Retrieved from https://www.ctvnews.ca/business/honda-kia-post-sales-gains-as-tesla-struggles-in-canada-1.6110591
- The elimination of electric vehicle rebates at both the federal level and in key provinces like British Columbia and Quebec has significantly reduced the financial appeal of Tesla vehicles for Canadian consumers, as the rebates previously made Teslas more affordable relative to gas-powered and competing electric vehicles.
- The removal of these rebates has directly contributed to the 67% year-over-year drop in Tesla registrations, down to just 9,000 units in the first half of 2025 compared to over 26,000 in the same period of 2024.
- While Tesla sales have slumped, other automakers like Honda and Kia have posted significant sales gains in Canada, suggesting a shift in consumer preference toward other brands, possibly due to more attractive pricing or incentives.
