Tesla has officially announced the Model Y Rear-Wheel Drive (RWD), formerly known as the Model Y Standard, now qualifies for the federal government’s new $5,000 Electric Vehicle Affordability Program (EVAP) rebate.
With the EVAP incentive applied, the Model Y Rear-Wheel Drive is now advertised at $44,990 for eligible buyers in Canada, reflecting the full $5,000 federal rebate.
Tesla’s configurator now displays the rebate alongside the vehicle price, indicating the Model Y RWD meets the program’s eligibility criteria for purchases or leases that fall within the required price threshold. The company also includes some information around eligibility criteria.
Along with adding eligibility for the rebate, Tesla has also made all three paint options available for the Model Y RWD, Stealth Grey, Pearl White, and Diamond Black, included in the base price and can now be configured with no extra charge, meaning any configuration qualifies for the rebate.
Previously, Pearl White was a $1,300 extra, while Diamond Black added $2,000 to the price. If you already have an order for these colours, Tesla will automatically adjust your final invoice price.
Why The Model Y RWD Didn’t Initially Qualify
The EVAP program determines eligibility based on a vehicle’s “final transaction value,” which must be $50,000 or less. However, the definition of that value excludes certain charges, including freight and pre-delivery inspection (PDI) fees.
That nuance created uncertainty around the Model Y’s eligibility. Previously, Tesla bundled these delivery-related charges under a ‘”Destination Fee,” which counted toward the vehicle’s final transaction value. Because the Model Y RWD had a base price $10 below the $50,000 threshold, that fee pushed the transaction value above the program’s limit, effectively disqualifying the vehicle from the incentive.
Tesla has now adjusted how those charges are presented in Canada. Instead of a destination fee that counted toward the eligibility calculation, Tesla now lists a $2,500 “Freight and PDI” charge, which is treated differently under the EVAP rules. Freight and PDI are explicitly excluded from the program’s final transaction value calculation, meaning they do not count toward the $50,000 limit.
With those fees separated, the Model Y RWD’s transaction price falls within the eligibility threshold, allowing it to qualify for the rebate.
The EVAP program, administered by Transport Canada, offers up to $5,000 for battery-electric vehicles and up to $2,500 for plug-in hybrids. The program is designed to encourage adoption of more affordable EVs by focusing incentives on vehicles with a final transaction value of $50,000 or less.
With the Model Y now qualifying for the EVAP incentive, what was once Canada’s most popular EVs has suddenly become far more competitive for those in the market for an affordable EV. The move could significantly boost Tesla’s sales in the country, which after the removal of the previous iZEV rebate and tariffs would pushed prices more than 20% higher than “normal,” dropped by more than 60% in 2025.
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• Tesla’s New Model Y Standard ditches the panoramic roof, but still uses glass – here’s why
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