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With a Price Cap, Canada Excludes Tesla Models from the Proposed $5,000 EV Incentive

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【Summary】Canada is proposing a federal budget which if approved, would mean that Canadian consumers will get a $5,000 incentive to purchase an electric vehicle. However, the price of a new EV cannot exceed $45,000, making Tesla’s entire lineup ineligible.

Manish Kharinta    Apr 01, 2019 1:05 PM PT
With a Price Cap, Canada Excludes Tesla Models from the Proposed $5,000 EV Incentive

It's safe to say that Q1 2019 has been very exciting for Tesla. The company recently completed its s "S3XY" portfolio and its Gigafactory in China is also coming together nicely. In  addition, Tesla managed to set a new record for deliveries in Norway but things don't look so great for the company in Canada.

Our neighbor to the north is proposing a federal budget which if approved, would mean that Canadian electric car buyers will get a $5,000 incentive to purchase an electric vehicle. The latest federal budget proposes certain conditions, one of which is a price cap.

In order to be eligible for the $5,000 incentive, the price of a new EV cannot exceed $45,000. This price cap makes Tesla's entire lineup ineligible. The lowest priced Tesla for sale  in Canada is the Standard-Range Model 3, which is priced at $47,600.

The Canadian government proposes to offer $300 million in EV incentives over the next 3 years to promote the adoption of zero-emission vehicles in Canada. Both battery and hydrogen fuel-cell powered vehicles priced under $45,000 will be eligible for the proposed incentive.

It can be argued that enforcing a tax on carbon emissions might help cut down on emissions much more effectively then offering incentives for the adoption of zero-emission vehicles.

Even so, it's possible that sales of Tesla vehicles will remain unaffected if excluded from the incentive. In the U.S. and other global markets, Tesla has managed to attract customers from many different segments. This also included a sizeable number of prospective performance sedan buyers.

The proposal might motivate other automakers to sell more affordable EV alternatives in Canada.


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