On April 24th, according to Reuters, a person familiar with the matter and a production memo seen by the media revealed that Tesla has started producing the Model Y electric vehicle in Shanghai, which will be sold in Canada this year. This is the first time Tesla has exported Chinese-made cars to North America.
The source said that Tesla’s Shanghai factory began producing Model Ys destined for Canada earlier this month. The production memo shows that the vehicles have been designed and tested for export to North America, with a target of producing nearly 9,000 units in this quarter.
Reportedly, the price of this model is 10,000 Canadian dollars lower than the Model Y currently sold in Canada and qualifies for the Canadian government’s new energy vehicle subsidy policy.
Tesla’s Shanghai factory is the largest and most cost-effective factory worldwide. Last year, it exported more than 270,000 Model Y and Model 3 sedans to Europe and other markets, accounting for one-fifth of Tesla’s global sales. Tesla CEO Elon Musk stated last week to analysts that the Shanghai factory has “the lowest cost structure.”
Tesla’s Shanghai factory produces Model Y using lithium iron phosphate batteries, which are cheaper, safer, and more durable than other types of batteries. Meanwhile, Tesla’s U.S. factories are introducing a more powerful battery called the 4680.
Tesla’s Canadian website shows that the new Model Y rear-wheel-drive version is expected to be delivered to customers between May and July, with a range of 394 kilometers. The current entry-level Model Y sold in the United States is a four-wheel-drive version with a range of 449 kilometers. The new Model Y is priced at CAD 44,275 in Canada, which is CAD 2,715 cheaper than the U.S. version.
Since the beginning of this year, Tesla has lowered the price of the Model Y in the United States three times as part of its sales strategy, which also reduced its first-quarter profit margin and sparked an electric vehicle price war.
Tesla is not the only company exporting electric vehicles from China. Renault’s Dacia brand is also exporting a low-priced electric car called the Spring to Europe, and BMW is exporting its iX3 electric SUV from China to Southeast Asia and Europe. China’s total automobile exports have quadrupled from 2020 to 2022, reaching two million units, and are expected to exceed three million units this year.
