Photo by RanaMotorWorks on Unsplash
SALES PLUMMET, CREDITS CUT AND CYBERTRUCK CONUNDRUM
As political backlash, EV policy changes and consumer confidence collide, Tesla faces a critical moment — with implications for Canada’s collision repair sector.
Tesla’s recent turbulence may seem like Silicon Valley drama, but its effects are already rippling through collision centres across Canada. With plummeting sales, a potential collapse of critical EV tax incentives and a glut of unsold Cybertrucks, the future of North America’s most high-profile EV brand is suddenly in question—and the impact on repair volumes, parts availability and longterm viability of Tesla-certified bodyshops could be profound. Elon Musk’s car company has made headlines recently, with global sales hitting the skids.
While many point to Musk’s shortterm stint as head of the Department of Government Efficiency, his very public feud with President Trump and his support for far-right political parties in Germany as the cause, there are several more—and far more severe—problems on the horizon for Tesla. Before his affiliation with Trump, Musk made several decisions that are now negatively impacting the company.
Tesla initiated significant price cuts across its models on Jan. 13, 2023, in the U.S. and other markets —in some cases reaching up to 20 percent— affecting vehicles like the Model 3 and Model Y. This angered buyers who had ordered a vehicle at the original price, only to see that by the time they took delivery, the identical car was priced significantly lower. These price reductions hurt resale values and damaged the brand’s perception. Additionally, the unusually styled Cybertruck reached peak production just as sales began to slow, resulting in a glut of unsold inventory.
Tesla sales in Canada were already declining prior to the federal government’s suspension of $43 million in EV rebates in March 2025 —an action that accelerated the downturn. The decline is especially evident in Quebec, where sales plummeted by 85 percent in the first three months of the year compared to the end of 2024.
Despite this sharp drop in sales, Tesla posted a $409 million profit for Q1 2025. However, that figure included $595 million in revenue from selling U.S. regulatory tax credits to other automakers. Without that $595 million, Tesla would have reported a $189 million loss. In 2024, Tesla generated $2.76 billion from these credit sales—a major concern, as the Trump administration has made it clear it wants to eliminate those tax credits altogether.
In addition, the Trump administration’s “Big Beautiful Bill,” recently signed into law, eliminates the US$7,500 tax credit for new EVs and the US$4,000 credit for used EVs as of Sept. 30, 2025—a change that will further impact Tesla sales.
Now, Tesla is facing a dramatic fall in sales, the possible elimination of a $2.76 billion revenue stream, a glut of its most expensive vehicle—the Cybertruck—and a damaged public reputation due to its CEO’s actions. Those are significant headwinds to overcome. The question is: will Tesla survive?
