Tesla Sales Plunge in Canada Amid EV Competition
Tesla sales in Canada continue to plunge as electric vehicle (EV) competition grows stronger. The automaker’s second-quarter results confirmed the slide, with global revenue dropping 12% to $22.5 billion, operating margins sinking to 4.1%, and deliveries falling 14% to 384,122 units. In Canada, the fall is sharper—registrations collapsed 67% in the first half of 2025. Quebec led the decline with an 85% drop in just three months.
Reputation Takes a Hit
Tesla’s challenges go beyond sales figures. CEO Elon Musk’s political affiliations have damaged the brand’s appeal, particularly in left-leaning markets. Many Canadians now hesitate to associate with Tesla, further dragging down demand. Meanwhile, Chinese EV makers like BYD and established giants such as Volkswagen are seizing market share.
Canada’s ZEV Mandate and Tesla’s Role
Canada’s zero-emission vehicle (ZEV) mandate requires automakers to meet strict electric sales targets. Falling short forces them to buy credits from competitors, often Tesla. While this policy benefits Tesla financially, critics argue it unfairly penalizes legacy automakers and limits consumer choice. Some manufacturers say government-sold credits would create a fairer system.
Rebates and Tariffs Add Pressure
The expiration of Canada’s $3-billion federal iZEV rebate program hit Tesla especially hard. The automaker had claimed $43 million in incentives, sparking controversy before being cleared of wrongdoing. Yet, provincial governments in B.C., Nova Scotia, P.E.I., and Manitoba later cut Tesla from local rebate programs.
At the same time, tariffs increased the price of Tesla’s best-seller, the Model Y, by $20,000. The company responded with price cuts and import adjustments, but these moves risk alienating past buyers while eroding profitability.
Can Tesla Recover?
Experts believe Tesla’s only clear path back involves significant price reductions, though tariffs may limit how far the company can go. Lower prices might win back consumers but could frustrate existing owners who paid more, creating another dilemma for the brand.
As for Canada’s EV market, many industry leaders urge the federal government to rethink or scrap the ZEV mandate, arguing the current system burdens automakers and confuses consumers. Without reforms, both Tesla and its rivals may struggle to balance affordability with compliance.
Stay tuned to Maple Wire for more insights on Tesla, EV trends, and Canada’s auto industry future.
