Curious why Tesla penalizes Canadians more than other manufacturers?

[bcsteeve]

I was doing a bit of research into various EVs availably in Canada, and one thing I noticed was the implied exchange rates and how Tesla penalizes Canadians more than any other manufacturer.

As like-for-like as I could manage, this is what I found (in all cases I selected as similar options as possible and used MSRP after freight but before taxes or incentives):

Ford is friends to Canadians... and also foe.

Ford F-150 Lighting Pro costs $63,195 in Canada vs $54,830 in the USA, implying one USD is $1.15 CAD, which is far below the actual exchange rate of 1.37, and the best on the list.

On the other hand, the Platinum and Lariat versions have implied exchange rates of 1.35 and 1.36 respectively (only Tesla is worse).

Their Mach-e all come in at 1.28.

Hyundai hopes Canadians buy their Ionic 6 more than Kona.

The 6 has an implied exchange rate of only 1.17. The Kona is in the middle of the pack at 1.23, which is still a discount off the actual current rate.

Cadillac covets Canadians.

It ranges between 1.17 and 1.20 depending on the exact trim and options, with the Sport 2 being the most exchange rate friendly and the Luxury trims being the worse, but all are very good.

Nissan needs Canadians, and Volvo values us too (but not with their premium offers).

The Ariya Platinum+ costs $72,987 here vs $62,055 down south, for a 4th best implied rate of 1.18
The Volvo XC40 Core ties that figure. However, if you want their Plus or Ultimate offerings, you're into 1.23 and 1.24 territory.

Tesla treats Canadians less nicely, and is the only manufacturer that charges a higher rate than the banks.

Model X - 1.41!
Model 3 - 1.39!
Model S - 1.34
Model Y - 1.34


I couldn't say why the other manufacturers discount their wares for Canadians... but I admit the fact that they do has me taking a closer look at them.

 

[jjrandorin]

Im not in Canada, but this is interesting information, thanks for taking the time to share it with everyone.

The only thought I have is, just like things like interest rates, Companies will sell things for whatever they think the market will bear. I know there are different effective prices for vehicles in Europe vs the US as well.

I havent seen it laid out quite as clearly as your post though, so I find this interesting. Even though it doesnt impact me, I wanted to thank you for sharing it.

 

[bcsteeve]

Indeed, Tesla can price how they want to.
I've been sort of tracking this for a long time now, but not consistently. Back in 2015 I noticed that Tesla was way, WAY below the actual exchange rate at that time. They were effectively charging us only $1.05 per US dollar, when the actual rate was around $1.30. My guess is that they set the price when the rate was actually at 1.05 (late 2013) and just sort of never paid attention again.

Until they did lol... because it seemed like they woke up to the situation and began punishing us ever since! By the time 2019 came around, I had to swallow my national pride to buy my Model 3 because my car was priced 1.45 times higher than the same car in the US (with the actual exchange rates being somewhere around where they are now - 1.35-1.38).

It had been an unusually fast change in rates (1.00 in Jan 2013 to 1.40 Jan 2016) and I can't imagine it is easy to price items globally. But for me, right now, looking at buying my next car... I'm not sure it is going to be a Tesla when there are compelling offers elsewhere with much more favorable relative pricing. (plus Elon has become such a %^&#$ that I sort of don't want to anyway. But man I hate getting into any other car and having to turn it on).

 

[Oveeus]

Pricing is a very delicate issue in business. So, it's sometimes irrelevant to discuss it. As an international enterprise, Tesla hedges its currency bet to a certain extent to normalize its price. This way, it doesn't matter how the currency is moving, it can maintain a relatively stable pricing.

And if you really take a look, in the Ford Lightning example you provided, G/L getting that particular model at MSRP. It's meant for fleet only and it means very little its pricing as it's not something regular folks have access to. And even that would be a stretch.

The in-laws of one of my contractors owns a Ford dealership here in the lower mainland, and she has never received a Ford Lightning Pro according to her.

 

[bcsteeve]

True, I didn't account for availability or dealer markup at all.

 

[DuncanM]

I was doing a bit of research into various EVs availably in Canada, and one thing I noticed was the implied exchange rates and how Tesla penalizes Canadians more than any other manufacturer.

As like-for-like as I could manage, this is what I found (in all cases I selected as similar options as possible and used MSRP after freight but before taxes or incentives):

Ford is friends to Canadians... and also foe.

Ford F-150 Lighting Pro costs $63,195 in Canada vs $54,830 in the USA, implying one USD is $1.15 CAD, which is far below the actual exchange rate of 1.37, and the best on the list.

On the other hand, the Platinum and Lariat versions have implied exchange rates of 1.35 and 1.36 respectively (only Tesla is worse).

Their Mach-e all come in at 1.28.

Hyundai hopes Canadians buy their Ionic 6 more than Kona.

The 6 has an implied exchange rate of only 1.17. The Kona is in the middle of the pack at 1.23, which is still a discount off the actual current rate.

Cadillac covets Canadians.

It ranges between 1.17 and 1.20 depending on the exact trim and options, with the Sport 2 being the most exchange rate friendly and the Luxury trims being the worse, but all are very good.

Nissan needs Canadians, and Volvo values us too (but not with their premium offers).

The Ariya Platinum+ costs $72,987 here vs $62,055 down south, for a 4th best implied rate of 1.18
The Volvo XC40 Core ties that figure. However, if you want their Plus or Ultimate offerings, you're into 1.23 and 1.24 territory.

Tesla treats Canadians less nicely, and is the only manufacturer that charges a higher rate than the banks.

Model X - 1.41!
Model 3 - 1.39!
Model S - 1.34
Model Y - 1.34


I couldn't say why the other manufacturers discount their wares for Canadians... but I admit the fact that they do has me taking a closer look at them.

In some cases it may be related to how much of the car or parts therein, is built in Canada. In other cases it has to do with cars being imported into Canada from Japan (for example) vs the same car being assembled in the USA for the USA market. The thing with Tesla is that cars being imported direct from China, for the Cdn market should be relatively cheaper than the same car that's built in the USA (China vs Freemont for example).

 

[GtiMart]

Some of the Canadian prices might be set to be included within some limits for tax credits or returns. It's probably even more so in Quebec where we get two credits, one federal and one provincial (don't know about other provinces). And as someone else said, they're not adjusted for exchange rate, they're priced for the market following how each brand wants to be perceived and how much they think their target buyer will spend for their vehicle (Capitalism!)

 

[wayner]

I am not sure that this "penalty" is always the case, as it can depend on when the car makers adjust their pricing.

The other issue is that it can be hard to compare models across countries as you can't always do a like for like comparison as, other than Tesla, they rarely offer the same package of options in Canada as the US. Or at least that was the case when I looked at this a few years back.

 

[richyrich]

Interesting stuff @bcsteeve. Checking out some others, Rivian R1T beats even Tesla at 1.49! They want $130k for a truck that is $87k in the US! WTF. Audi and VW seem to be middle of the pack in the mid 1.20s.

As others have said, I don't think Tesla pricing is supposed to be a direct currency conversion, it's what the market will carry. I assume same for Rivian, although I suspect they don't particularly want to sell a lot in Canada when they have no service centers.

 

[bcsteeve]

Tesla treats Canadians less nicely, and is the only manufacturer that charges a higher rate than the banks.

Model X - 1.41!
Model 3 - 1.39!
Model S - 1.34
Model Y - 1.34

As is the case with Tesla, the info rapidly changes. As of today I notice the USA site doesn't include freight/PDI or "order fee" while the Canadian one does. I honestly don't know if the actual prices changed or just the presentation of fees, but it changes the implied exchange rates, which are now as follows:

Model 3 Performance US$52,630 vs C$75,170 = 1.43
Model Y Performance US$54,130 vs C$76,170 = 1.41
Model X Plaid US$96,630 vs C$132,870 = 1.38
Model 3 RWD US$40,630 vs C$55,870 =1.38
Model 3 LR US$47,630 vs C$65,870 = 1.38
Model S Plaid US$91,630 vs C$126,870 = 1.38
Model Y LR US$50,630 vs C$69,870 = 1.38
Model X US$81,630 vs C$111,870 = 1.37
Model S US$76,630 vs C$101,870 = 1.33
Model Y RWD US$45,630 vs C$59,870 = 1.31

Note I'm not including any non-Tesla charges/incentives and all entries are devoid of any optional upgrades (which can make a difference since, for example, FSD is US$12k vs CA$16k or 1.33 USD/CAD)

 

[wayner]

Those implied exchange rates pretty much average out at 1.38 which is where it is trading today.

 

[bcsteeve]

Coincidentally so, yes. The overall point was in relation to the other manufacturers, not the dollar value itself.

I did recognize, eventually, that I shouldn't have posited why Tesla "penalizes" us, so much as why they don't favor us as much as other manufacturers. International trade has always provided different countries/regions with different pricing. Clearly, the automotive industry as a whole feels that Canada needs lower pricing to be competitive. Tesla, as per usual, marches to its own drum. Which is fine while they are well ahead in their segments, but as more options come to the fore they're going to have to price competitively for their own good. Other manufacturers are giving us a better deal than Tesla is. That's fact.

It is all academic. People choose what they want. If Tesla sees Canada as an insignificant market that doesn't require paying attention to this sort of thing, that's their prerogative. Math doesn't lie though. At some point, someone will look at some data and wonder why Tesla is slipping in Canada in relation to the US sales, and someone will no doubt chalk it up to quirky Canadian winters... when the truth is, the competition showed us more love

 

[dskid]

I was doing a bit of research into various EVs availably in Canada, and one thing I noticed was the implied exchange rates and how Tesla penalizes Canadians more than any other manufacturer.

As like-for-like as I could manage, this is what I found (in all cases I selected as similar options as possible and used MSRP after freight but before taxes or incentives):

Ford is friends to Canadians... and also foe.

Ford F-150 Lighting Pro costs $63,195 in Canada vs $54,830 in the USA, implying one USD is $1.15 CAD, which is far below the actual exchange rate of 1.37, and the best on the list.

On the other hand, the Platinum and Lariat versions have implied exchange rates of 1.35 and 1.36 respectively (only Tesla is worse).

Their Mach-e all come in at 1.28.

Hyundai hopes Canadians buy their Ionic 6 more than Kona.

The 6 has an implied exchange rate of only 1.17. The Kona is in the middle of the pack at 1.23, which is still a discount off the actual current rate.

Cadillac covets Canadians.

It ranges between 1.17 and 1.20 depending on the exact trim and options, with the Sport 2 being the most exchange rate friendly and the Luxury trims being the worse, but all are very good.

Nissan needs Canadians, and Volvo values us too (but not with their premium offers).

The Ariya Platinum+ costs $72,987 here vs $62,055 down south, for a 4th best implied rate of 1.18
The Volvo XC40 Core ties that figure. However, if you want their Plus or Ultimate offerings, you're into 1.23 and 1.24 territory.

Tesla treats Canadians less nicely, and is the only manufacturer that charges a higher rate than the banks.

Model X - 1.41!
Model 3 - 1.39!
Model S - 1.34
Model Y - 1.34


I couldn't say why the other manufacturers discount their wares for Canadians... but I admit the fact that they do has me taking a closer look at them.

It goes both ways. Tesla is also unique in that their vehicles are delivered weeks from being built, and likely more reactive to exchange. But when we bought our X in 2019 we bought cheaper than the Americans could.

 

[CapeOne]

As is the case with Tesla, the info rapidly changes. As of today I notice the USA site doesn't include freight/PDI or "order fee" while the Canadian one does. I honestly don't know if the actual prices changed or just the presentation of fees, but it changes the implied exchange rates, which are now as follows:

Based on my calculations, prices between U.S. and Canada are fairly similar when factoring in exchange rate. Teslas in Canada are sometimes lower priced than they are in the U.S. For example, the price of a RWD Model Y in the U.S. (including destination fee and order fee) is $45,630. The price in Canada (including destination fee and order fee) is $60,120 but adjusted to U.S. dollars is around $44,185 which is over 3% lower than the U.S. price.

Another example is the base Model S. U.S. price is $76,630. Canada price is $102,120 but in U.S. dollars is around $75,053 which is over 2% lower than the U.S. price.

 

[DuncanM]

Based on my calculations, prices between U.S. and Canada are fairly similar when factoring in exchange rate. Teslas in Canada are sometimes lower priced than they are in the U.S. For example, the price of a RWD Model Y in the U.S. (including destination fee and order fee) is $45,630. The price in Canada (including destination fee and order fee) is $60,120 but adjusted to U.S. dollars is around $44,185 which is over 3% lower than the U.S. price.

Another example is the base Model S. U.S. price is $76,630. Canada price is $102,120 but in U.S. dollars is around $75,053 which is over 2% lower than the U.S. price.

True, but the MIC M3 and MY sold in Canada should be somewhat less expensive than comparable cars built in the USA.

 

[chinney]

At least in Canada we can actually get a Tesla easily and quickly. For EVs from other manufacturers there are often limited selection, long waiting lists, and considerable delays (sometimes years) for models which in the U.S. are easily available on dealership lots. Also, in respect of pricing in Canada, due to the limited availability (and maybe for other reasons) a lot of dealers have been applying premium markups for EVs, so the 'bargain' for EVs from other manufacturers as between Canada and the U.S. in light of the currency exchange rates is not what might initially appear.

 

[Threader]

US Inventory RWD Model 3 going for $35,000 US today in some areas before any incentives. Not as cheap north of the border.