Tesla Could Blame Canada for Slower Sales

 

Effective May 1, the Canadian government will be offering a new $5,000 tax credit to those who purchase an electric car. The timing of this tax incentive couldn’t be better for everyone’s favorite automotive underdog that seems to insist it’s actually the top dog – Tesla. Earlier this year, the company surpassed a sales benchmark that led to the U.S. tax incentive being cut in half. By selling more than 200,000 vehicles, Tesla saw their customer’s incentive reduced to $3,750.

The Canadian guidelines state that for vehicles with six or fewer seats to quality, the base model must carry a Manufacturer’s Suggested Retail Price of less than $45,000. It also covers higher-priced versions of the same model, allowing for certain upgrades, as long as that retail price doesn’t exceed $55,000. For vehicles with seven or more seats, the numbers go up to $55,000 and $60,000, respectively.

The problem for Tesla, as reported by Business Insider, is that once the exchange rates hit, Tesla’s vehicles carry MSRPs that exceed those limits. Their least expensive option, the Model 3, starts at nearly $54,000 in Canada.

So, while Tesla might think their biggest competitors come from luxury brands that would also fail to meet these price points in qualifying for a tax break, the reality is that lower-priced EVs like the Chevy Bolt, Chrysler Pacifica, Audi A3 e-tron and Ford Fusion Energi do qualify. And due to the expanded footprint of their parent company’s dealerships, these vehicles are easier to buy, service, and maintain.

Then again, maybe Tesla isn’t too concerned. After all, the number of vehicles on Canadian roads is about one-eighth that of the U.S. It’s a difference of about 230 million vehicles.

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