Tesla is now selling its Model 3 and Y EVs in Canada; these are models produced in China. According to a confirmation post on its website, the first electric vehicle shipments from Tesla’s Shanghai manufacturing plant to North America have been completed.
The website displayed Model Y vehicles with rear-wheel drive as well as the long-range, all-wheel-drive Model 3, available to be delivered in British Columbia immediately. The production codes indicated that the vehicles came from Tesla’s Gigafactory in Shanghai.
The two models are eligible for federal subsidies of C$5,000 within Canada, which isn’t the case in the Unites States. America’s subsidies are subject to the country where the EV was made.
As exports from China soar, cost benefits have risen for Tesla and many other automakers. In Canada, a Chinese version of the Model Y was priced at C$61,990. Prior to incentives, the cost of a similar vehicle would have been about 22% higher on the Chinese market.
If Tesla exports from Shanghai to Canada, the company could be able to sell vehicles produced in its Texas and California factories within the United States, which would qualify the vehicles for a possible tax credit of as much as $7,500 through the subsidy program provided for by the Joe Biden administration. Additionally, this creates a fresh market for Gigafactory Shanghai, which was responsible for more than 50% of the total production of the company in 2022.
Tesla’s Gigafactory in Shanghai produces electric automobiles for sale within China and to international markets, such as Europe. However, Tesla is facing increasing price and quality competition from Chinese electric vehicle manufacturers, and its Berlin-based factory has been increasing Model Y production for clients in Europe.
An identifier code is used whenever Tesla lists a vehicle for sale. This code matches the initial three figures on the identification numbers of the vehicle, also known as the VIN. All the VINs on Tesla cars built in Shanghai begin with the letters LURW.
Tesla announced in April that it would launch a new and lower-priced version of its Model Y sports utility vehicle in the Canada market. A rear-wheel drive for this variant would qualify for Canadian government subsidies. The vehicles listed on the company’s website as being eligible for the tax credit have a VIN code as proof that Tesla’s Shanghai facility produced them.
As more manufacturers in China eye export EV markets, the struggle for market share is likely to get tougher for all players across the board, including startups such as Nikola Corporation (NASDAQ: NKLA) that may not have deep pockets as do Tesla and legacy vehicle makers.
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