Tesla has announced that it will increase the price of its most affordable electric vehicle (EV), the Model 3 compact sedan, by $9,000 on February 1. That means that in Canada the price of the vehicle will have increased by a total of around $10,000 in the first month of the year.
In addition, the Models Y, X, and S will also see their prices increase on February 1, albeit by a smaller amount: $4,000. So far, no increase has been announced for the Cybertruck. The automaker did not explain the reasoning behind its decision to hike prices, though it coincides with the date on which U.S. President Donald Trump says widespread tariffs will be imposed on Canada. Tesla CEO Elon Musk was at the president’s inauguration on Monday and has become increasingly involved in the administration over recent months.
In addition to the $9,000 and $4,000 price hikes, Tesla also increased the prices of its vehicles earlier this month, soon after Transport Canada announced that the Incentives for Zero-Emissions Vehicles (iZEV) program had fully committed all of its funds and that federal incentives for consumers buying an EV, a plug-in hybrid, or another new energy vehicle would be paused until at least March.
While other automakers announced their own incentives to make up for the $5,000 ZEV buyers might have lost out on with the iZEV program pause, Tesla increased prices. Over the course of its history, the automaker has frequently changed the prices of its vehicles, and the January increase could be seen as just the latest such adjustment.
To start the year, the Model Y cost less than $60,000, which allowed it to meet pricing eligibility criteria for the iZEV program. After the pause was announced, the price of the Model Y rose from $59,990 to $60,990. Now, the automaker has revealed that on February 1, the crossover will cost $64,990.
At the same time as it increased the price of the Model Y by $1,000, Tesla did the same for the Model 3, changing its price from $54,990 to $55,990 (the price cap for eligibility in the iZEV program is lower for sedans than SUVs). On February 1, it will rise to $64,990.
It’s hard to say exactly what is behind Tesla’s reasoning, though. Some of its vehicles have not been eligible for incentives since October, when vehicles imported from China or other countries that do not have a free trade agreement with Canada lost eligibility for the program.