Are you considering buying a Tesla Model 3 in Canada?
Despite Mr. Thrifty’s admonishments against car ownership, sometimes a private vehicle is desirable for the sake of flexibility and convenience. Time is money, after all. And there are ways to recover some of the cost (or even make a profit) such as offering it on car-sharing platforms like Turo.
Having confronted this situation and concluded that a private car was necessary in his current situation, Mr. Thrifty went about researching which car offers the best financial proposition (this article was originally written in Spring 2021 and updated in May 2023). The key considerations were upfront cost, reliability, maintenance cost, safety, and resale value. If the car delivered comfort and style, those would be additional bonuses.
What did he choose in the end? A Tesla Model 3.
Here’s what “drove” this choice:
- Generous rebates being offered at the federal & provincial levels, which brought down the up-front price by nearly 25% (not specific to Tesla, but only Tesla’s Model 3 Standard Range Plus qualifies for the Canadian federal rebate on electric vehicles).
- The best network of charging stations means that the risk of being inconvenienced or even stranded due to a depleted battery is fairly low. In fact, Tesla has a cross-Canada network which means you can drive across the country without being out of range of a Tesla recharging point. It is the most reliable national network.
- Technological improvements to battery efficiency in harsh Canadian winters. Before the current generation of the Tesla Model 3 that uses a heat pump, winter driving meant a 40% reduction in the car battery’s efficiency. That made it hard to make many inter-city trips in winter without carefully planned recharging stops.
- Low regular maintenance. Unlike a petrol-powered engine, there is no need for regular oil changes. Moreover, with Tesla’s regenerative braking technology, you use the brake pedal less than in a conventional car, thus reducing the wear and tear on your brake pads.
- Outstanding service and support. The car’s operating system and app are regularly updated, they offer mobile service for small repairs that don’t require a visit to the dealership, and 24/7 emergency assistance.
If you’re in a similar situation in considering buying a Tesla Model 3 in Canada, read on for Mr. Thrifty’s biggest questions during his research phase and the answers gleaned from online forums, YouTube videos, friends with Teslas, and the Tesla dealership (special thanks to Anthony [anstarnino@tesla.com] from Tesla Montreal).
If you’re close to placing an order and find value from this post, please consider using Mr. Thrifty’s Tesla referral link which will benefit both you and Mr. Thrifty. At the time of writing (May, 2023) Tesla has reintroduced its referral program and new buyers using a referral link can qualify for up to 2,500km in free charging credit.
Click here to use Mr. Thrifty’s Tesla Referral Link
Mr. Thrifty’s Top Pre-Purchase FAQs for the Tesla Model 3 in Canada
How will a Tesla Model 3 perform in Canadian winter?
One of the biggest questions was how the car would perform in cold Canadian winters. There’s only so much research one can perform without experiencing the car in real winter conditions. On this front, Mr. Thrifty has been severely disappointed (this refers to the standard rear-wheel drive version).
As a Californian company, designing for extreme conditions is not a priority for Tesla. They don’t include a rear wiper, a heated steering wheel, nor heated rear seats. Winter safety in general is clearly an afterthought.
Reports from Canadian drivers noted that the battery drained much more quickly in cold temperatures. However, newer Tesla models use a heat pump and are much more efficient. Having scoured online reviews and YouTube, Mr. Thrifty got comfortable that winter starting wouldn’t be an issue. Moreover, Tesla offers ample options for upgrading to 4WD if you consider this a must-have.
Comfort in winter is bolstered by the Tesla app’s ability to warm up the car before you get in, and the Model 3 comes standard with a heated steering wheel and heated seats.
However, a real issue is driving over snow and ice. Since the battery is located along the undercarriage, there’s a risk of damaging it if you scrape the underside of the car while driving over heavy ice and snow.
The car is also very low to the ground. The low ground clearance means that it gets bogged down in the snow far more easily than other cars. Read more about surviving in winter here.
What are the hidden costs involved in owning a Tesla Model 3?
An electric vehicle offers two principle areas of savings over a traditional vehicle: fuel and maintenance.
However, not much is written about the hidden costs of owning an electric vehicle.
Phantom drain
Phantom drain occurs when the battery’s energy is being used while the car is not being driven. Energy is dissipated for such things like sentry mode, climate control, Bluetooth, and checking the Tesla app (which wakes up the car). Another phenomenon occurs in colder climates, when the battery’s calculated mileage drops in colder temperatures. However, this loss is recovered once the battery warms up. Measures of phantom drain vary and can be reduced by turning off the features listed above. Owners report a typical phantom drain of around 2km per hour of idle time.
Wall connector
You’ll also likely want to install a high-capacity charger in your home. The current retail price of the Tesla wall connector is $635. You’d also need to hire a professional electrician to install it. Some provinces or territories (like British Columbia, Quebec and Yukon) partially subsidize the cost of the home charger equipment and installation. The need for a wall connector is discussed as a separate FAQ below.
Connectivity
All Teslas come with Standard Connectivity which provides access to most connectivity features over Wi-Fi only, in addition to basic maps and navigation and music streaming over Bluetooth. If you want access to all the features while not on a Wi-Fi network, you would need to opt for the Premium Connectivity service that would work over a cellular network. Premium Connectivity is available as a monthly subscription of $13.99 plus applicable tax.
Obsolescence
Perhaps the biggest wildcard is technological obsolescence, particularly with the batteries. You pretty much know what to expect with a traditional car – there are incremental improvements such as better fuel economy and the new generation of hybrid engines. With a Tesla or any other pure EV, there is a non-trivial risk that battery technology could improve dramatically over the next 3-5 years, which would cause the resale value of current models to plummet. While the risk is real, the economic impact is harder to gauge. Older EVs would still have the current operating costs and it would merely be less convenient to charge them more frequently. Tesla probably wouldn’t want to shoot itself in the foot by alienating its customers, so would likely offer a battery upgrade at a reasonable cost. Finally, you should also be conscious that buying a gas-powered vehicle could be even more risky as the general attractiveness of such vehicles could really decline significantly as EVs and the related infrastructure become even more widespread.
Do I need to install a Tesla wall connector in my garage?
A standard 110V household outlet can serve as a charging point for your Tesla. However, the capacity of a standard 110V outlet limits your charging rate to approximately 2-4 miles / 3.2-6.4 km per hour. In a typical scenario, you might leave your Tesla to charge overnight for 8-10 hours.
If you want to go faster, there are 2 main choices:
- Install a 240V outlet (typically in your garage) + buy a NEMA plug adapter ($44-$55)
- Install a Tesla wall connector ($635 for the connector + installation cost)
The high voltage options increase your hourly charging rate to between 11-44 miles / 17.7-70.8 km per hour.
Are the high-voltage options necessary? It depends on how you’ll be using the car. If you’re driving more than 50km per day, you should consider them. Some provinces or territories (like British Columbia, Quebec and Yukon) subsidize the cost of installing a Tesla wall connector.
What is the resale value projection for the Tesla Model 3 in Canada?
This is really hard to pin down. When this article was first written, in 2021, Teslas were in very high demand and there was a shortage of cars available on the resale market. This situation has changed radically as more electric vehicles have entered the picture (such as the BMW i4 and the Volkswagen ID.4) and Tesla has responded by reducing prices. All major car manufacturers have plans for electric models and electric engines are set to become a normal feature/option.
But Tesla has a few tricks up its sleeve to keep the secondary market value of their cars high. For example, operating system upgrades are regularly delivered via software downloads and these typically increase the efficiency of your car’s battery and other systems. Another big wildcard is the rollout of full self-driving capability (FSD). The promise of FSD is very alluring and it’s an option that you can purchase up front. In the near future it could make the car fully autonomous and open up the possibility of renting it out as a taxi while you’re not using it. Tesla has a leg up on the competition in terms of FSD so this could make all the existing Teslas more desirable from a financial perspective.
How long does the Tesla Model 3 battery last? How much would it cost to replace it?
Depending on the version of the Model 3 you choose, the battery is warranted for minimum of 8 years or 160,000 km, whichever comes first, with minimum 70% retention of battery capacity over the warranty period.
Note that these warranties cover defects and manufacturing issues and not damage that you might do as the owner, such as driving over rocks or ice that damage the battery irreparably. This type of damage would normally be covered by your insurance.
In the worst case scenario in which you’d need a full battery replacement and it wasn’t covered under warranty or insurance, you’d be looking at a bill of ~ C$20,000. Essentially, you should factor into your buying decision that the residual value after 8 years may be zero (or the value of the parts less the battery). More likely, it could be bought back by Tesla for use in their planned robotaxi network.
What are the most common repairs and maintenance required for a Tesla Model 3?
From Mr. Thrifty’s online research, there are a number of common mechanical and software glitches requiring repair that have been reported by Tesla owners. Common complaints include things like switches not working, door handles not closing, charge port doors not opening automatically, windshield wiper malfunctions.
Expected maintenance includes tire rotation and replacement, and changing to winter tires in Canada. Other regular expected maintenance requirements include things like cabin air filters replacement, wiper blades replacement, brake caliper cleaning, and brake fluid replacement.
In general, Tesla’s high-tech bells and whistles, and connectivity, lead to further points where things can break compared to a conventional car. This is more than offset by having fewer engine parts.
So, in general, drivers can expect a somewhat lower incidence of repairs and maintenance in an electric vehicle.
For a good evaluation of long-term reliability and the cost of repairs, please view this YouTube video (note that the car was driven in Kentucky, USA, not in Canada).
Should I buy or lease a new Tesla Model 3 in Canada?
Considering the risk of a large drop-off in resale value after a certain point, might it make more sense to lease a Tesla rather than buy it? Leasing gives you certainty over the residual value so you’re removing a real and non-trivial risk to ownership. Who knows what the competitive landscape for electric vehicles will look like in 3-4 years? It’s certain that the major car manufacturers will be flooding the market with new electric models, which will remove some of the novelty surrounding Tesla.
On the other hand, with Tesla’s regular software upgrades, it could help the car avoid some of the obsolescence issues that traditional cars would experience. For example, when the long-promised full self driving mode is rolled out, it could be pushed out to all Tesla vehicles and instantly add value to the car.
Can I negotiate the price of a Tesla Model 3 in Canada? Are there any direct buyer incentives?
Tesla’s online booking process eliminates the opportunity for direct negotiation over the purchase price. It’s much more like buying a computer, whereby you choose your options and are presented with a final price.
Having said that, there have been a few opportunities in the past to make your money go farther. But these are offers made by Tesla rather than something you can control. If you are patient, you might be able to benefit from an offer of free Supercharger credit or free upgrades during slow sales periods or when Tesla is trying its best to achieve quarterly sales quotas. These offers would appear towards the end of each quarter but there is no guarantee or regular pattern that one could anticipate. In a recent 10-month period in Canada, Tesla offered such incentives only once.
The only regular concession is through the Tesla customer referral program. All Tesla buyers are issued a referral code and if you use such a code during your online order, both you and the person providing the code receive a benefit. This is Mr. Thrifty’s referral link, which could be worth up to 2,500km in charging credit, depending on model you buy.
What if I own a company? Are there any government tax incentives to purchase a Tesla Model 3?
Yes, indeed.
According to the Transport Canada website:
“Budget 2019 proposed a 100-per-cent write-off for zero-emission vehicles to support business adoption. Eligible zero-emission vehicles include, a motor vehicle that is a plug-in hybrid (with a battery capacity of at least 7 kWh) or vehicles that are fully electric or fully powered by hydrogen, including light-, medium- and heavy-duty vehicles purchased by a business. This measure applies to eligible vehicles purchased and becoming available for use on or after March 19, 2019 and before January 1, 2024. Where the capital costs for eligible zero-emission passenger vehicles (e.g., cars and SUVs) exceeds $55,000, the 100 per-cent write off will be limited to $55,000 plus the federal and provincial sales tax that would have been paid if the vehicle was purchased for $55,000.
Vehicles in respect of which an incentive is paid under the new federal Incentive for Zero-Emission Vehicles Program will be ineligible for the 100-per-cent write-off.
For more information on the tax write-off for these vehicles, businesses and self-employed individuals may contact the Canada Revenue Agency at 1-800-959-5525.”
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Do you have additional questions about buying a Tesla Model 3 in Canada?
Email us at ask@mrthrifty.ca. Keep in mind that Mr. Thrifty is not a car expert and will answer questions primarily through a financial prism.
If you’re close to placing an order and find value from this post, please consider using Mr. Thrifty’s Tesla referral link which will benefit both you and Mr. Thrifty. At the time of writing (May, 2023) the bonus for using this referral link is up to 2500km in Supercharger credit.
Click here to use Mr. Thrifty’s Tesla Referral Link
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