An industry insider suggested to the Financial Post that Tesla CEO Elon Musk is facing a "no-win" situation in Canada as tariffs loom and his brand struggles to recover from reputational damage — and a key government policy shift is making matters more complicated.
What's happening?
Global Automakers of Canada President and CEO David Adams broke down why Tesla's uninspiring start to 2025 could stretch into the coming months or years after the electric vehicle maker reported a 12% year-over-year drop in revenue in a second-quarter update.
"A lot of it is their CEO's association with the Trump administration and his work there and then also his blatant antagonism towards Canada as well," Adams told the Financial Post. "It's certainly damaging the brand, and the reality is that there are a lot of people who frankly don't want to be associated with the brand, especially in Canada."
Why is this important?
While protecting the planet is a non-partisan issue — for instance, nearly 80% of right-leaning respondents aged 18 to 35 in the United States said in a 2019 American Conservation Coalition poll that addressing climate change is important — the Trump administration has drawn ire for its outspoken commitment to dirty fuels and its disincentivization of green projects.
Musk's involvement in the administration caused many eco-minded consumers to associate Tesla — long lauded as a leader in clean technologies — with these policies.
Ultimately, Musk's political activities led to more than 376,000 residents signed a petition calling for the prime minister to revoke Musk's Canadian citizenship, alleging Musk "has engaged in activities that go against the national interest," including using his wealth and power to influence elections.
In response, Musk wrote in a now-deleted post on X, per Politico, "Canada is not a real country," further straining relations amid existing fears he was trying to undermine Canadian sovereignty.
What does this mean for the EV market in Canada?
The global EV market remains robust. Increased competition from both established and emerging brands, such as Ford and BYD, has helped bring down the upfront price of the zero-tailpipe-emissions vehicles, benefiting public health, the environment, and consumers who want to save on energy and maintenance.
However, Canadian EV sales are experiencing a stunning decline. According to Statistics Canada, 35.2% fewer EVs were sold in June compared to June 2024.
One reason for this is that the government's zero-emission vehicles rebate program effectively ended in January, according to the Financial Post, negatively impacting not only Tesla (which claimed 43 million Canadian dollars in rebates) but also the broader market.
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Definitely 👍 Adams suggested the government should reexamine its EV mandate to get things back on track. However, he doesn't see a clear path forward for Tesla, even if the automaker slashes prices to try to win back consumers.
He pointed to how tariffs will make it more difficult for the company to be profitable on Canadian soil and emphasized that Musk could further burn through his goodwill.
"The challenge when you start [reducing the price] is that all the people who paid the higher price a year or six months ago, you antagonize all those previous owners and then undervalue the resale value of their vehicle as well," Adams said.
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