Tesla’s sales woes have reached Canada.
Data from the vehicle registration authority in the province of Québec shows a dramatic decline in Tesla registrations in the first quarter of 2025.
Only 524 new Tesla vehicles were registered in Québec between January and March 2025, down over 85% from the 5,097 units logged in the final months of 2024.
The company’s top-selling Model Y saw the steepest drop in terms of pure numbers, falling from 3,274 units in the final quarter of 2024 to 360 in the first quarter of 2025. The Model 3, Tesla’s cheapest car, plunged from 1,786 to just 96 units over the same period, a fall of 94%.
While the drop is precipitous, it should be noted that auto sales are generally lower in the first quarter of the year than later in the year.
Though confined to one region of Canada, the collapse mirrors similar issues in Europe, where Tesla sales fell by nearly 50% in April despite overall EV demand continuing to grow.
In Québec, as in Europe, demand for electric vehicles remains strong, suggesting that Tesla’s slump is less about market conditions and more about the brand itself.
Rebate freeze and trade tensions
Several factors appear to be converging.
Tesla has been excluded from Canada’s federal EV rebate program, with $43 million in rebates frozen and each individual claim now under review.
Transport Minister Chrystia Freeland ordered the freeze in March following a last-minute surge in Tesla rebate applications — from 300 a day to nearly 5,800 — which triggered a probe into possible abuse.
Freeland also said that Tesla would remain ineligible for future incentives as long as President Donald Trump’s 25% tariffs on Canadian goods are in place.
In parallel, provinces, including British Columbia, Prince Edward Island, and Manitoba, have removed Tesla from their rebate programs.
Political backlash and brand damage
Tesla’s registration drop in Québec also comes amid a broader global backlash, especially in Europe, against CEO Elon Musk, who has endorsed a number of right-wing European political parties, including support for Germany’s far-right AfD party and Britain’s populist Reform UK party.
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In North America, Musk’s role leading the Department of Government Efficiency has led to protests, boycotts, and vandalism of Tesla dealerships across at least a dozen states.
Musk said this week he was stepping away from DOGE after months of involvement as a “special government employee.” Federal law stipulates that those with this title cannot serve for more than 130 days in a 365-day period.
Tesla’s shares, which had come under pressure during Musk’s DOGE stint, began rebounding in April after he announced he would step back from government work and “spend 24/7 at work” on his companies.
In a Q&A published by Ars Technica on Tuesday, he said he’d been too involved in politics since wading into the 2024 presidential race last year — a campaign he heavily financed to the tune of nearly $300 million.
In a sit-down with Bloomberg at the Qatar Economic Forum last week, he said he’s no longer going to be spending big on politics, like he did in the 2024 election.
Tesla did not immediately respond to a request for comment from Business Insider.