Tesla is facing growing backlash from local consumers as it raises prices for its entire lineup of electric vehicles in the Canadian market by up to 22%. The move is interpreted as a result of President Donald Trump’s trade policy and the tariff conflict between the U.S. and Canada.
Tesla will apply the increased prices to new orders and vehicles newly imported into Canada, with the increase amount being reflected by up to 22% for each model. Tesla has not disclosed the official reason for the price increase, but it is interpreted as being related to the situation in which the Canadian government imposed retaliatory tariffs on U.S. products following the U.S. raising tariffs on Canadian products.
Tesla has already been struggling in the Canadian market since the beginning of this year. Following the Canadian federal government’s decision to end subsidies for electric vehicle purchases, CEO Elon Musk’s past remark that “Canada is not a real country” has fueled public resentment in the region. Furthermore, as it became known that CEO Musk had donated a large sum of money to President Trump’s re-election campaign, Tesla emerged as a major target of the movement to boycott US products.
This price increase is expected to provide additional impetus to this boycott movement. In particular, there is a growing consumer backlash against American products in Canada, so Tesla is likely to suffer a significant blow in the local market.
Tesla’s price hike in the Canadian market is an example of how sensitive the global auto industry is to political risk.
Tesla is currently restructuring its sales strategy across North America. In the US, it is under pressure to lower prices due to reduced electric vehicle tax benefits and intensifying competition, but in Canada, it is taking the opposite approach of raising prices due to the aftermath of the trade war. As a result, Tesla is suffering from the double whammy of consumer dissatisfaction and damage to its brand image in both markets.
Recently, major US automakers such as Ford, General Motors, and Stellantis have also been adjusting their strategies to respond to the Canadian market. For example, Ford recently adopted a strategy of freezing or slightly lowering prices for some electric vehicle models by linking them to a Canadian-only incentive program. On the other hand, Tesla is making the opposite choice, which is further provoking local consumer backlash.
In addition, the impact of corporate leadership behavior, such as political statements or political sponsorships on brands, is also drawing attention again. Elon Musk’s close relationship with President Trump may have a positive effect on some consumers in the US, but it is having the opposite effect in overseas markets.
The global auto industry is now entering an era where sensitive response strategies to political, trade, and social issues are essential, not just product and price competition. This Tesla case provides important implications for how global companies will manage political and social risks in each market in the future.
