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Electric Power, Energy Transition, Renewables
January 23, 2025
By Daniel Weeks
HIGHLIGHTS
Canadian EV incentive dries up, US tax credit targeted
Tesla aimed to roll out cheaper models this year
Tesla said it will raise prices of cars sold in Canada, the company's website showed Jan. 23, ahead of a potentially tumultuous year of policy reversals in the North American EV market.
The Tesla Model Y, X and S will increase in price by up to CAD$4,000, and the Model 3 will increase by up to CAD$9,000, according to Tesla's Canadian website. The price hikes will go into effect on Feb. 1, the statements say.
Tesla did not provide a reason for its price hikes.
The company saw record Q4 deliveries in 2024 but annual deliveries dropped 1% compared with 2023. Tesla said it would focus on material cost reductions and release a new line of cheaper models starting in 2025.
The prices hikes come ahead of a potentially more challenging North American EV market in 2025, with President Donald Trump rolling back EV charger funding support and taking aim at the $7,500 EV tax credit. This credit has benefitted Tesla the most as the largest EV seller in the country, S&P Global Commodity Insights analysts said.
Transport Canada announced on Jan. 10 that its federal zero-emission vehicle incentive program ran out of funds. Some manufacturers said they would offer EV rebates after the federal program ran dry, Automotive News Canada reported.
The premium price of EVs is a primary concern for consumers, so removing a subsidy program that helps close the cost gap with internal combustion engine vehicles disadvantages all manufacturers, said Suzanna Massingue, low carbon transportation analyst at Commodity Insights.
The Canadian program has incented over 546,000 vehicles, "helping Canada reach a new ZEV market share of 11.7% in 2023, a significant increase from 3.1% in 2019," Transport Canada said. The country saw a zero-emission vehicle market share of 16.5% in Q3 2024.
The Incentives for Zero-Emission Vehicles Program was scheduled to pause March 31 or when the funding was exhausted.
President Donald Trump said Jan. 20 the US would impose 25% tariffs on all imports from Canada starting Feb. 1. Commodity Insights analysts said that tariffs affecting Canadian and Mexican oil may not endure if it contradicts efforts to lower oil prices.
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