In response to Canada's federal electric cars incentive price cap below $45,000 or $55,000 with options, Tesla lowered the cost of the Model 3 to $44,999 in the country. However, it also software-locked the vehicle to only 150 km (93 miles) of range. Is Tesla trying to take advantage by selling the new base Model 3 with half the range and a reduced price of $2,000? Well if this were the case, the automaker would have offered to unlock the range as an option which doesn't seem to be happening. Indeed Tesla claims that “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.”

Instead of selling the range limited Model 3, Tesla seems like it's trying to push the upgraded Model 3. By lowering the price of the base Model 3, the Standard Range Plus becomes suitable for the incentive since it is technically an option for a car which starting price is below $45,000 and doesn't go over $55,000.

As we have already reported, to be eligible for the new federal EV incentive in Canada, the MSRP of the EV must be lower than C$45,000, and the total price with options needs to be under C$55,000. Canada's intent with the rule is to make sure it isn't just handing out money to very wealthy folks to buy electric cars.

The incentive has been explained by the government as follows:

Thus, government rules have disqualified the Tesla Model 3 from being eligible for the incentive because the base Model 3 starts at C$47,000 (US$35,000). In response, as similarly already done in Germany after objecting to the country's EV incentive price cap, Tesla lowered the price of the Model 3 to $44,999 in Canada, but it also software-locked the vehicle to only 150 km (93 miles) of range.

2019 Tesla Model 3 Performance

Tesla wrote on its incentive page of its Canadian website:

"Federal $5,000 rebate for individuals purchasing vehicles with a base MSRP* under $45,000 before including delivery fees. The following Tesla vehicles qualify for the federal incentive provided that they are also listed on Transport Canada’s website:

2019 Model 3 Standard Range (Canada)

Range: 150km

Qualifying OEM MSRP* before delivery center fees and EV savings: $44,999

Call or visit a Tesla store to order.

2019 Model 3 Standard Range Plus

Range: 386 (EPA estimate)

Qualifying OEM MSRP* before delivery fees and EV savings: $53,700

Order online

*MSRP shown is based on the definition established by Transport Canada for the purposes of the iZEV program. This price excludes a $1,300 delivery and inspection fee and standard vehicle registration fees."

Is amazing how Tesla, at the same time, made a new base Model 3 - which is available only through calling or visiting a Tesla store to order - and the regular Model 3 Standard Range Plus with 386 km (240 miles), both now eligible for Canada's federal new EV's incentive. Model 3 Standard Range Plus becomes suitable for the incentive since it is technically an option for a car that has a starting price below $45,000 and doesn't go over $55,000.

It looks clear enough, at least to me, that Tesla is not trying to sell the base Model 3, which range has been cut in half and the price has only been reduced by $2,000. If that was the case then Tesla would have given the base Model 3 the option of increased range as a reasonably priced option, as already done in the past. Unfortunately, the automaker is telling his Canadian customers:

Further reading

Read our full review on the 2018 Tesla Model 3.