Tesla launched a new, cheaper Model 3 with 150km range in Canada to get access to the new $5,000 federal incentive, but we’re now learning that the company is not offering any range upgrade on that new version of the Model 3 — effectively making the vehicle unsellable.
As we previously reported, Canada’s federal government launched a new $5,000 incentive at the purchase of new electric vehicles with base prices of less than $45,000 and that cost no more than $55,000 after options.
The government explains the incentive:
“To be eligible for incentives, a vehicle must have a base-model manufacturer’s suggested retail price of less than $45,000 for passenger vehicles with six or fewer seats, and less than $55,000 for vehicles with seven or more seats. For eligible vehicles with six or fewer seats, higher priced versions (trims) are eligible as long as the final manufacturer’s suggested retail price is $55,000 or less.”
It disqualified Tesla’s vehicles from being eligible to the incentive because the base Model 3, which is only available as an “off-the-menu item”, starts at $47,000.
In response earlier this week, Tesla has lowered the price of the vehicle to $44,999 in Canada, but it also software-locked the vehicle to only 150 km (93 miles) of range.
Tesla has done that in the past, but the automaker offered to unlock the range as an option for a cost similar to the original cost before the range decrease.
Buyers in Canada reached out to us saying that Tesla salespeople were saying that they were not aware of any such upgrade in this case.
We contacted a Tesla spokesperson about the situation and the automaker confirmed that they are not offering any range upgrade through a software update for the base version at $45,000.
That’s despite them having cut the range in half and only having reduced the price by $2,000.
Update: Tesla says that it has been saying the following to customers:
“In order to be eligible for the incentive in Canada and provide our customers with this benefit, we are unable to offer a range upgrade on Model 3 Standard Range cars.”
It was always clear that the goal here is to get around the government’s stupid restriction to get access to the incentive for the Model 3 and push for the Model 3 Standard Range Plus, but Tesla clearly wants no one to buy the base version here.
We have been going back and forth about whether or not the base Model 3 at $35,000 USD is truly available since Tesla is producing it as a software-locked Standard Range Plus and sells it as an “off-the-menu item”.
In Canada, that debate is over. Tesla is clearly not selling the vehicle because it made it an extremely bad value with only 150 km of range for $45,000 without the option to increase the range through a software update.
Again, it was clear that the goal of this move was to make the Model 3 Standard Range Plus eligible for the $5,000 incentive.
It’s a success on that front, but it’s unclear why Tesla isn’t offering the Standard Range version with an upgrade option, which would come at no additional cost to Tesla, or at least reducing the range in a reasonable way.
In my opinion, it looks like another tactic to move away from selling the vehicle.
Either way, people should definitely not buy the vehicle right now because 150 km makes no sense for that price if you can’t upgrade at some point, which Tesla is not confirming.
However, the Model 3 Standard Range Plus remains a good option at $55,000 before the $5,000 incentive. It comes standard with Autopilot, unlike the base version.
At ~$50,000 CAD, it’s equivalent to ~$37,000 USD and the same version costs $39,500 in the US before any incentive.
It’s not an incredible deal, but we generally pay more in Canada than in the US. It’s not the case now, but that’s after incentive in Canada.
Therefore, it’s an interesting opportunity, but I’m not going to hide the fact that I’m extremely disappointed that Tesla is not offering a real $45,000 CAD version of the Model 3 in Canada. That’s a shame
Ideally, they would offer the vehicle for $45,000 with 250 km of range and the option to unlock the rest for $2,000 – resulting in the original price of $47,000. There’s no reason for this to not be the case right now other than Tesla not wanting to sell the Model 3 Standard Range.
Update: some people in the comments are making a nonsensical mistake that is being consistently upvoted for some weird reason. Let’s squash it now. The reason Tesla is not offering a software upgrade for range is not based on the law.
The Model 3 Standard Range versions with 150 km and 350 km of range are both already software-locked version of the Model 3 Standard Range Plus. All the different software-locked range options are determined by Tesla and as long as they offer a base version for less than $45,000 they can offer other version and get access to the $5,000 incentive up to $55,000 total MSRP.
If Tesla decides to reduce the range to 150 km, it’s because they don’t want to sell that version of the vehicle.
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