Tesla saw a massive decline in first-quarter sales in Quebec. According to provincial data from the Société de l’assurance automobile du Québec, Tesla registrations dropped 90% between January and March 2025 compared to the previous quarter. Just 524 Teslas were registered, a sharp contrast to the 5,097 seen in Q4 2024.
But while this headline-grabbing decline might suggest an outright rejection of the brand, a closer look reveals a more complex situation—one influenced by timing, incentives, tariffs, and political backlash.
At the heart of the slump was a perfect storm of shifting policies and buyer uncertainty. Most significantly, Quebec’s generous provincial EV rebate program was paused from February 1 to April 1, leaving buyers in limbo. This pause came after the rebate amount was reduced from $7,000 to $4,000 on January 1, 2025, and although the program was still active, placing an order in January didn’t guarantee delivery in time to qualify for the incentive.
As a result, many would-be buyers simply waited.
This uncertainty had a ripple effect. Buyers rushed to secure their vehicles before the pause and the lowering of the rebate amount, leading to higher than typical December and Q4 2024 numbers. The surge made the following quarter’s sales dip appear even more dramatic, though in reality it was skewed from the spike.
Adding to the spike, the federal government’s Incentives for Zero-Emission Vehicles (iZEV) program was also paused indefinitely in early January, further eroding the total potential savings available to buyers. Until December 31, 2024, Quebecers could stack the two rebates for up to $12,000 off the cost of a new Tesla. By mid-January, that amount was $0.
The loss of these programs not only made Teslas significantly more expensive, but also disrupted buying timelines, pushing potential customers to delay or abandon purchases.
Tariffs have added another layer of complexity. In response to U.S. President Donald Trump’s trade policies, Canada introduced a 25% tariff on U.S.-made EVs, including Tesla. With Tesla passing these extra costs down to consumers, raising prices more than 20%, some buyers have turned to alternatives—or put off buying altogether.
And then there’s the political factor. Tesla CEO Elon Musk has increasingly become a divisive figure, especially in Canada. From controversial social media posts to his involvement in U.S. politics, Musk’s personal brand has become deeply polarizing. While some are able to separate the man from the machine, others are steering clear of Tesla due to the perceived baggage.
Adding to the controversy, Tesla is under federal investigation in Canada over a last-minute sales spike at the end of March. The company reported delivering over 8,600 vehicles in just the final three days of the rebate program, triggering a probe into whether all those deliveries actually occurred as claimed. However, Tesla fought back against those claims, but the damage had already been done.
While Tesla bore the brunt of the drop, it wasn’t alone. Preliminary S&P Global data indicates that EV registrations in Quebec as a whole declined by 65% in the same quarter (via CBC), suggesting that the entire market was affected by the combined loss of rebates, fluctuating prices, and general uncertainty.
With Quebec’s rebate program now reinstated and the federal government’s pledge to bring back the iZEV rebate, the coming months will show whether Tesla’s Q1 sales slump was a temporary dip—or the beginning of a longer-term shift in consumer sentiment.
