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Canada’s New Electric Car Incentives Snub Tesla

Starting May 1st, it looks like the Canadian government will offer a $5,000 CAD incentive towards the purchase of a zero-emission vehicle.  But while a majority of the most popular models will be eligible, it looks like none of Canada’s electric car incentives will apply to Tesla vehicles.

Vehicles Eligible for Canada’s Electric Car Incentives

To start, qualified passenger vehicles must contain an eligible electric battery, hydrogen fuel cell, or be a longer-range plug-in hybrid.   For those with six or fewer seats, the price tag must list a manufacturer’s suggested retail price of less than $45,000 CAD (though higher priced versions of the same models may be eligible as long as they fall under $55,000).  For those with seven or more seats, they must have an MSRP of less than $55,000 CAD. 

But the Tesla Model 3, by far the most popular electric vehicle in Canada, starts at $53,700 CAD on Tesla’s website. 

Models such as the Nissan Leaf, Chevy Bolt, Hyundai Ioniq, and Kia Soul will be eligible for the program.  The eight-seat Chrysler Pacifica hybrid, Canada’s only native-manufactured electric vehicle, will make the cut as well with a list price of $51,000 CAD.  The incentive will also be applicable for the only electric vehicle manufactured in Canada, the eight-seat Chrysler Pacifica hybrid, which is currently listed at $51,000.

In addition, a $2,500 CAD discount will be offered towards the purchase or lease of short-range plug-in hybrid vehicles.

The federal incentive stacks with other provincial rebates in places such as British Columbia and Quebec.  For example, consumers in British Columbia could get as much as $16,000 CAD off of a hydrogen-powered car if they receive the new $5,000 CAD incentive, the $6,000 CAD provincial rebate, and turn in an old gas-powered car for another $5,000 CAD.

Canada Aims to Prepare For the Future

As Transport Canada has said on their website:

“Canada is committed to decarbonizing the country’s transportation sector and becoming a global leader in zero-emissions vehicle.  Analysis has shown that without any further action, Canada could achieve zero-emissions vehicle sales of 4% to 6% of all new light-duty vehicles purchased by 2025 and 5% to 10% by 2030.”

By 2040, Ottawa has set a target of 100% of car sales to be for zero-emission vehicles.


Why was Tesla seemingly cut out of government incentives intended to spur electric car purchases?  The most reasonable explanation has to do with cost.  In order to increase the quantity of electric vehicles on the road, the price of the car must be accessible to more consumers, including those with lower income who are looking for functionality over luxury.  Tesla unfortunately has a tendency to target a more affluent customer base. 

It is not like Tesla cannot come in under the $45,000 CAD cutoff.  When the Tesla base Model 3 still existed, it was marketed at $47,000.  It does not seem far-fetched that Tesla could potentially work with Transport Canada to find some compromise that would allow them to take advantage of the increased sales the incentive would likely bring them. 

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