Tesla Launches RWD Model 3 Premium in Canada for Just $39K CAD ($29K USD)

Tesla reshapes Canada’s Model 3 lineup with new Premium RWD and steep price cuts

Canada’s electric-vehicle market just shifted. Tesla has revamped its Model 3 lineup in Canada, adding a new entry price that changes the equation for shoppers.

The company launched the Model 3 Premium Rear-Wheel Drive (RWD) and simultaneously reduced the price of the top-tier Performance trim.

This is not a seasonal discount or a minor price tweak to stimulate quarterly demand.

Drastically Reducing the Starting Price

The previously least expensive Model 3 Long Range, priced at $79,990 CAD, has been discontinued. In its place is the new Model 3 Premium RWD, starting at $39,490 CAD.

That shift amounts to a 50% reduction in the entry cost for a new Tesla sedan in Canada. At a starting price of $39,490 CAD, the equivalent is $29,000 USD.

For years, the industry has pointed to a $25,000 EV as the threshold for mass adoption. With this pricing structure, Tesla effectively reaches that mark, offering a technologically mature, premium electric sedan at a level that undercuts much of the internal combustion engine (ICE) market.

What Caused the Price Drop

A 50% decline cannot be explained by simple price moves alone; supply chains and tariffs play a central role.

Previously, vehicles sent to Canada faced U.S.–Canada tariffs that drove prices higher, which is why the $79,990 CAD Long Range effectively became the entry option.

Tesla has since reworked its supply chain, sourcing and importing certain configurations—such as the Premium RWD—under a more favorable setup to reduce costs.

Instead of keeping those savings as profit, the company is using them to make prices more competitive and drive higher sales across Canada.

Slashing the Performance Trim

Alongside the new base model, the price of the Model 3 Performance has been cut by 17%, moving from $89,990 CAD to $74,990 CAD.

Beating Legacy and Chinese OEMs

At $39,490 CAD, the Model 3 Premium RWD shifts out of luxury territory. It targets shoppers comparing mid-tier ICE vehicles like the Honda Civic or Toyota Corolla, as well as offerings from Chinese OEMs entering the Canadian market.

Competitors aiming to introduce entry-level EVs in Canada must now measure up against a technologically superior, Supercharger-compatible Tesla positioned at effectively $29,000 USD.