American-made vehicles are losing ground in Canada, with new data showing their share of the Canadian auto market dropped sharply during the first half of 2026 as tariffs forced automakers to rethink where they source their vehicles.
According to J.D. Power Canada data reported by The Globe and Mail, U.S.-built vehicles accounted for just 28.4% of new vehicle sales between January and June, down from 35.4% during the same period last year. That’s a 7-percentage-point decline, or nearly 20% of their previous market share.
Tesla has been one of the clearest examples of this shift. As Drive Tesla previously reported, the automaker moved Canadian Model Y supply from the United States to Giga Berlin to avoid Ottawa’s 25% counter-tariffs.
The change allowed Tesla to slash Model Y prices by $20,000. More recently, Tesla also began importing Shanghai-built Model 3 sedans under Canada’s new Chinese EV quota, which allows 49,000 vehicles annually at a 6.1% tariff.
The move was so popular Tesla forced the government’s hand to limit the number of vehicles Tesla could import over a fear they would leave none for other automakers.
Mexico and Japan Gain Market Share
The latest figures show Mexico benefiting significantly from these changes, with its share climbing from 18.3% to 22.2%, according to J.D. Power figures. Japan also gained ground, increasing from 13.7% to 16.6%, while South Korea rose from 14.6% to 15.6%.
Where Canada’s new vehicles are built
Share of Canadian new-vehicle sales by country of assembly, first half of year (%)
Share of sales (%)
Source: J.D. Power Canada data, as reported by The Globe and Mail and The Car Guide.
Meanwhile, Canadian-built vehicles accounted for 11.5% of sales, down 9% year-over-year.
“Our data shows the largest change for vehicles coming out of the U.S.,” said Robert Karwel, director of OEM Solutions with J.D. Power in Canada.
Tesla isn’t alone. Mazda stopped Canadian sales of its Alabama-built CX-50, while Volvo halted imports of its South Carolina-built EX90.
Despite the decline, American-made vehicles still hold the largest individual share of Canada’s market. However, with tariffs remaining in place and manufacturers increasingly sourcing vehicles elsewhere, the shift away from U.S. production could continue into 2027.
Related Articles:
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- Tesla already takes over 10% of Canada’s Chinese-EV import quota in first window
- Global Affairs Canada addresses Tesla Model 3 order pause as 33,000 import spots remain available: Exclusive
- Volvo cancels EX30 in U.S. but keeps it alive in Canada
- Want a Tesla Model Y in Canada? You may have to wait until 2027
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