1. Summary

Our Q2 report opened on the arrival of the Shanghai-built Model 3, which reached Canada in May at a price no Model 3 had carried here before. Q3 is the quarter that supply ran into its ceiling. Canada admits Chinese-built electric vehicles at the lower tariff rate only up to a fixed annual volume, and in October Tesla's Canadian site stopped taking orders for both Model 3 Premium trims with a notice that high demand had exhausted its import quota, pointing to a possible resumption if Ottawa releases more. That is a notice rather than a settled position — nothing has been decided about what follows — but for the moment the cheapest Model 3 ever sold in this country cannot be ordered.

How much of the quota belongs to Tesla is not published; federal officials do not disclose company-level allocations. What is clear is that the quota has been, in practice, close to a Tesla quota: industry estimates put Teslas at roughly 97% of Chinese-built vehicles imported into Canada this year, and since Canadian Model Y supply comes from Berlin, that is almost entirely Model 3.

Inside the quarter the effect was felt as waiting rather than as price. Delivery estimates stretched through July and August, and by August 31 Tesla's Canadian configurator showed December 2026 to January 2027 for every Model 3 variant. The Berlin-built Model Y continued to quote months. So the question our Q2 report left open — whether the compression that pinned the newest Model 3 values would spread downward as the cheaper new Model 3 became more widely available — could not resolve the way it was framed. It never became more widely available. For a BC buyer in September who wanted a Tesla in the near term, the new car had left the comparison set.

The straightforward expectation from that is upward pressure on used values. It did not arrive. Across both of our deep observation sets, Q3 traded within about one percent of Q2 on a like-for-like basis, and the raw medians in those two segments moved less than four percent. The quarter was a plateau: a high one, thirteen to fifteen percent above where January began, but a plateau.

What absorbed the pressure was supply, and specifically the shape of it. Model 3 accounted for just over half of the vehicles we observed in Q1 and just over two thirds by Q3, with the increase spread evenly across every model year from 2019 to 2023 rather than concentrated in near-new cars. The cars reaching the secondary market got older and higher-mileage through the year. That is the signature of existing owners taking delivery of a new car and releasing an older one, against a quarter in which Tesla reported record deliveries in Canada.

Which is why the order pause reaches past the new-car showroom. The flow of released cars that held Q3 flat was fed by new-car deliveries, and the Model 3 side of that flow now has no settled near-term path. Q4 begins with more uncertainty attached to it than Q3 did.

2. Key Market Metrics

The charts below show approximate median secondary market transaction prices versus median odometer reading for each drivetrain configuration, broken down by model year. Bubble size indicates relative transaction volume. Model years with too few observations to be meaningful are omitted, as are near-new 2025–2026 Model Y units, which are effectively new cars being remarketed rather than ordinary used inventory. Those cars are treated separately in section 5.

2.1 Model 3 — RWD

Includes SR+, Standard Range, and RWD variants | Q3's highest-volume segment

2.2 Model 3 — AWD / Long Range / Dual Motor

Includes LR AWD, Long Range, and Dual Motor variants | Thinner observation set

2.3 Model Y — RWD

Includes Standard Range RWD and RWD variants | Note: not every model year had a RWD option

2.4 Model Y — AWD / Long Range / Dual Motor

Includes LR AWD, Long Range, and Dual Motor variants | Q3's highest-volume Model Y segment

2.5 Model Y — Performance

Includes Performance AWD variants | Thinner observation set, shown for continuity with our Q1 format

3. Used Market Price Trends

Q3 had none of Q2's shape. There was no soft open, no sharp recovery, no month that stood out. Each of the three months sat within about two points of the others in both of our deep segments. The table below shows where each tracked segment finished for the quarter as a whole against Q2.

3.1 Price Movement Summary

* Shown for continuity with our Q1 and Q2 format, but drawn from thinner observation sets and not intended as trend indicators. These rows also move with the mix of cars reaching the market in a given quarter, which in Q3 shifted substantially toward higher-mileage examples; the Model 3 AWD figure in particular is dominated by a shift toward much higher-mileage examples within the same model years. Model 3 RWD and Model Y AWD are the two segments deep enough to read with confidence. All figures are aggregated observations of general market activity.

3.2 Looking Past Composition: A Like-for-Like Index

Raw medians move with the mix of cars coming to market, and in Q3 that mix moved more than usual. To separate genuine price movement from a changing mix, we fit each segment's price against model year and mileage on a fixed baseline period, then track how actual transactions sit against that baseline over time. The index below carries forward the same baseline used in our Q2 report, so the January–June path is directly comparable to the chart published last quarter.

3.2.1 Like-for-Like Used Tesla Secondary Market Price Index (Observations)

Adjusted for model year and mileage | January 2026 = 100

Both segments gave back part of the Q2 run-up in July and then stopped moving. Model 3 RWD peaked at 122 in June, settled to 114 in July and finished September at 115. Model Y AWD peaked at 115 in June and finished September at 113. Measured directly against the Q2 baseline rather than against January, Model 3 RWD traded 1.2% below Q2 and Model Y AWD 0.2% above — which is to say, unchanged.

Two readings of a plateau are available and they are not equivalent. One is that the market found a clearing level and settled there. The other is that two opposing forces arrived at the same time and cancelled. The rest of this report argues for the second, because both forces are visible separately.

4. The Ceiling That Lapsed

4.1 What Changed on the New-Car Side

Three things moved during the quarter, all of them on availability rather than on price. In early June Tesla added a Shanghai-built Model 3 Premium AWD to the Canadian configurator at $49,990, with first deliveries quoted for late summer — roughly $30,000 below the $79,990 a US-built Long Range had reached in Canada once tariffs were applied. Through July and August, delivery estimates for the whole Model 3 line stretched out. On August 31 the configurator showed December 2026 to January 2027 for Premium RWD, Premium AWD and Performance alike. The new Model Y, built in Berlin and unchanged in price since March, continued to quote months.

The practical effect is that the new-car ceiling we described in Q2 stopped being a live alternative for anyone shopping in the quarter. A ceiling works by giving a buyer somewhere else to go. By September there was nowhere else to go until 2027.

4.2 The Compression Did Not Move Down

If the ceiling were spreading, the 2022 and 2023 cohorts would be the next to flatten. They did not. The chart below shows how much each model-year cohort moved from Q2 to Q3 after adjusting for mileage, expressed in percentage points against its own Q2 position.

4.2.1 Where the Ceiling Pressed in Q3

Mileage-adjusted change from Q2 by model year, in percentage points

The Model 3 column from 2019 to 2023 is flat: five cohorts within a range of three and a half points, with no ordering to them. In Q2 the same column ran from +28.9 points on 2019 cars down to +4.1 points on 2024 cars, a clean monotonic slope. That slope is gone. What remains is a single cohort, the 2024 cars, sitting well below the rest.

The reading is that the ceiling never moved down the curve. It stayed where it was in Q2, on the newest facelifted cars. Everything beneath it moved within a narrow band, with no ordering to it.

The 2024 figure rests on the thinnest observation set in the table and carries wide error bars; the flatness of the five cohorts above it is the more robust observation.

4.3 Model Y as the Control

Model Y is the second half of the same natural experiment. Its new-car price did not change at any point in Q3, its delivery times were long throughout, and its curve shows nothing resembling the Model 3 pattern — all five cohorts within four points of flat and the 2024 cars up rather than down. In Q2 the same comparison separated the effect of a new-car price cut from everything else happening in the market. In Q3 it does the same work in reverse: the nameplate whose new-car price was cut is the only one with a cohort under pressure, and the pressure sits where a substitution effect would put it.

4.4 Why Values Did Not Rise Instead

With the new car unavailable, the question stops being why used values failed to fall and becomes why they failed to rise. The most plausible answer is on the supply side, and it is visible in the composition of what reached the secondary market.

Model 3 went from half of the vehicles we observed to better than two thirds in two quarters, while Model Y fell by more than a third of its share. The Model 3 increase was not concentrated in near-new cars: every model year from 2019 through 2023 contributed, in broadly similar proportion. Alongside that, the median odometer reading of everything reaching the secondary market rose by roughly a fifth over three quarters.

That combination — more Model 3, spread across older model years, at rising mileage — is what a trade-in wave looks like from the receiving end. It coincides with a quarter in which Tesla reported record deliveries in Canada. Owners who took delivery of a new car released an older one, and the older one landed here.

5. Paying for Time: The Refreshed Model Y

The clearest single observation of the quarter sits at the very top of the Model Y curve, among cars we normally set aside. Refreshed Model Ys with delivery mileage have been reaching the secondary market since the spring. They are not ordinary used inventory and we exclude them from the segment charts, but what they trade at is worth reporting on its own.

5.1 Refreshed Model Y: Secondary Market vs. New-Car Cost

Observed secondary market price range against the full new-car cost in Canada

A list price is not what a new car costs. Every new Tesla in Canada also carries $2,500 of freight and PDI, a $100 federal excise tax on its air conditioner and a $26 tire levy — $2,626 that a used car does not carry. Comparing like with like means adding those to the new-car side.

On that basis, refreshed Model Y Premium AWD examples changed hands in the secondary market between roughly $65,500 and $68,800, with a typical level around $66,600, against a new-car cost of $67,616 — within about one and a half percent of the new car, with the stronger examples above it. Refreshed Model Y RWD examples with delivery mileage traded between $49,250 and $50,000 against a new-car cost of $52,616 — a gap of a few percent, before anything is spent on the car. The new RWD also carries the $5,000 federal incentive, credited after tax, which a used buyer does not receive at all; counting it widens the new car's advantage on that trim rather than narrowing it. Sales tax applies on both sides and is excluded from the figures above.

Those are acquisition prices, which is the important qualification. Nothing acquired at that level reaches a retail buyer below it. By the time either of these cars is offered to a consumer, a nearly-new refreshed Model Y sits level with or above what the same car costs new.

Paying new-car money for a car with four figures on the odometer is not a mistake about what the car is worth. It is the purchase of the one thing the new-car channel could not supply during the quarter, which is a car now.

The arithmetic only works while the wait holds. The premium is the price of time, and it expires the moment the factory catches up.

6. Redesign vs. Hardware, One Year On

Our Q2 report used the 2024 model year as a natural experiment. Model 3 gained both the Highland redesign and Tesla's HW4 (AI4) computer that year; Model Y gained HW4 alone, keeping its existing body. Comparing the two year-on-year steps separates what buyers pay for the visible car from what they pay for the computer behind the windshield. A quarter later, the experiment can be re-run on fresh observations.

6.1 The Hardware Step Is Still Ordinary

The table below shows the mileage-adjusted price step between consecutive model years, computed on Q3 observations alone.

Model Y's 2023-to-2024 step — pure hardware, same car — comes in at 8.5%, sitting inside its own ordinary range and below its 2022-to-2023 step of 11.6%. That is the same answer we reported in Q2, when the figure was 6.7% on first-half observations. Two independent readings, drawn from different halves of the year, now say the same thing: the market does not pay for the newer autonomy computer.

6.2 What Narrowed Was the Redesign Premium

The Model 3 side has moved, and in one direction. Its 2023-to-2024 step, which bundles the redesign with the same hardware change, measures 12.8% on Q3 observations against 25.3% on the pooled first-half observations we reported last quarter. The two figures are drawn from different windows and are not a like-for-like pair, so some part of the gap may be a windowing effect. The size of it is not easily explained that way.

Set against the Model Y control, the implication is specific. Since the hardware step stayed inside its ordinary range in both readings, the component that compressed is the premium buyers assign to the visible 2024 redesign. That is exactly where the new-car ceiling sits: the facelifted Model 3 is the used car a new Model 3 most directly replaces, and it is the only part of the curve under pressure. The premium for sheet metal is being squeezed; the premium for silicon was never there to squeeze.

6.3 Hardware Is Also Not Arriving in Volume

A second reason the market has not priced the hardware generation is that very little of it is here. HW4 cars — 2024 model year and newer — remain a small minority of what reaches the secondary market, and on the Model 3 side the share has fallen for two consecutive quarters.

A buyer who wanted to pay a premium for HW4 in a used Model 3 this quarter would have had to find one first. These cars are still years away from being common in this market, which is itself part of why no premium has formed.

7. Q4 2026 Factor E Outlook

The Quota, Not the Price, Now Sets Model 3 Supply

The Model 3 story has moved from pricing to trade policy. Canada's lower tariff on Chinese-built electric vehicles comes from a January 2026 arrangement that cut the rate on a fixed annual volume — 49,000 vehicles — from 100% to 6.1%, reached alongside China dropping its duties on Canadian canola seed. The quota year runs from March 1 and is split into two six-month periods. In the first, 24,500 units were allotted and 15,603 were imported, leaving 8,897 to roll forward into a second period of 33,397 units.

On October 12, after the close of the quarter, Tesla stopped taking Canadian orders for both Model 3 Premium trims, with a notice on its design page stating that high demand had exhausted Tesla's import quota and that ordering would resume if the federal government issues more, which it expects in March 2027. Model 3 Performance remained orderable.

Two details are worth holding onto. First, the national quota is nowhere near exhausted: as of the federal import-permit tracker on October 9, 33,069 of the year's permits — roughly two thirds — were unused, and only 328 Chinese-built EVs entered Canada in September. What is exhausted is Tesla's own share. Second, the 97% share noted in our summary is an industry estimate rather than a government count; the identified non-Tesla remainder runs to a few hundred units across three other nameplates, and no public source breaks the balance down by model.

The alternatives are both constrained. Berlin builds Model Y for this market, not Model 3. A US-built Model 3 would carry Canada's 25% counter-tariff on applicable American automotive content, which is what pushed the US-sourced car to $55,990 here before Tesla switched Canadian supply to Shanghai. And a China-built Model 3 cannot qualify for the federal incentive at any price, because eligibility requires manufacture in Canada or in a country with a Canadian free-trade agreement — a constraint no quota decision will change.

For the used market, the consequence runs through supply rather than price. The trade-in wave that held Q3 values flat was fed by new-car deliveries. With the Model 3 order book closed through year-end, that feed thins. If our reading of Q3 is right, Q4 and Q1 should see Model 3's share of the secondary market stop rising, and used values firm rather than soften. That is the cleanest testable prediction this report makes, and we will report against it next quarter either way.

The Federal Incentive Steps Down on January 1

The Electric Vehicle Affordability Program is scheduled to pay a maximum of $4,000 on a battery-electric vehicle in 2027, down from $5,000 in 2026, with further reductions in later years. The $50,000 cap on final transaction value and the free-trade-agreement manufacturing requirement are unchanged.

In this market the step-down lands on exactly one vehicle: the Berlin-built Model Y RWD, the only Tesla that currently qualifies. Its effective price rises by $1,000 at the turn of the year. Anyone weighing that purchase should confirm the timing directly with their local Tesla centre, since how a given transaction is treated at the boundary is an administrative matter rather than a market one. The secondary effect is the one we will watch: a pull-forward of Model Y RWD deliveries into Q4 would put a corresponding wave of trade-ins into the secondary market in the first half of 2027.

Energy Prices

Metro Vancouver pump prices stayed within the same band through Q3 as they held in Q2, ending September close to where the previous quarter ended. Local fuel costs at these levels continue to keep the running-cost case for an EV in front of consumers, but the quarter brought no change in that input, and we would not attribute any part of Q3's flat used market to it.

What We Will Be Testing in Q4

Three questions carry forward. Whether used values firm once the trade-in feed thins, as set out above. Whether the premium on nearly-new refreshed Model Ys survives contact with improving Berlin supply, or disappears the moment the wait shortens. And whether the 2024 Model 3 cohort stabilises now that the car it was being measured against cannot be bought at all, or keeps giving ground for reasons we have not yet identified.