Note: all prices in the following article are in Canadian dollars.
The new Canadian iZEV incentive program for electric car customers took effect on May 1. It provides for a $5,000 rebate on any battery electric car with a base price of $45,000 or less. You would not be a fool to assume that the Tesla Model 3 Standard Range (SR) lists for more than $45,000, so is not eligible for the rebate.
Or is it?
There are two aspects of the iZEV program that need further explanation. One, the base price does not include transportation and delivery charges. Two, the actual car purchased may exceed the base price by up to $10,000 and still qualify.
Tesla has taken a closer look at those aspects and has come up with a new base model available solely in Canada and priced at $44,999. How did the company do that? Tesla limited the range to just 150 kilometers, barely more than a first-generation Nissan LEAF. Is the battery for this car software limited or is it actually a battery with fewer cells? Tesla has not yet clarified that issue, but there’s a 99% chance it’s simply software limited.
Reddit user b7XPbZCdMrqR (yes, that’s supposed to be a name) offers this insight: “So to get around this, Tesla is offering an incredibly awful car for $44,999, and their regular offerings at their normal price. It’s entirely possible that the people who try to take advantage of this “cheap” version end up getting a hand-built battery pack with 16 kWh of cells, and would be stuck with a car that can only go 150 km.”
The Model 3 SR+, with 386 kilometers of range, lists for $53,700, which is under the $55,000 upper limit for the iZEV program. It can be ordered online. The new Canadian base model requires interested customers to “call or visit a Tesla store to order.” Tesla adds a $1,300 delivery and inspection fee to all Canadian Model 3s.
So, Tesla has found some wiggle room in the iZEV program. Nothing requires a manufacturer to actually sell any of its base model cars. To repeat, we don’t know if the battery in the Canadian version is software limited, but if it is, the buyer or a subsequent owner can almost certainly unlock more range for a fee. If so, will that violate the terms of the iZEV program? Nobody knows. Policymakers may not have considered the question.
If in fact the car has a battery with fewer cells, any buyer would have to assume the resale value of such a car would be severely affected. Tesla might actually sell 4 or 5 of these “base model” cars — probably to treehuggers in British Columbia — but the important point is that Tesla’s workaround will unlock Model 3 SR+ sales in Canada, so if the company does lose money on a few cars, it will more than make up for that in sales of its regular offerings.
We don’t know if Canadian officials are comfortable with what Tesla has done. But as Elon Musk has said in other circumstances, Tesla doesn’t make the rules, it just takes advantage of the opportunities available to it. Can’t really fault them for being clever, can we?
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