Tesla to enable cross-border importation, but to what extent?

Both the US and Canadian governments require individuals wishing to export/import their car across the border to obtain a compliance letter from the vehicle’s manufacturer. This attests that the vehicle meets all the relevant sections of the U.S. Federal Motor Vehicle Safety Standards and the Canada Motor Vehicle Safety Standards, depending on which way the car is going. (The US and Canada have gone to great lengths to harmonize these standards through the Regulatory Cooperation Council). The compliance letter also warns of any outstanding recall notices.

Yesterday a Twitter user complained to Elon Musk that they were unable to bring their Tesla with them when they moved from the US to Canada. Elon responded on Twitter saying that “you should be allowed to move your Tesla anywhere in the world, unless it’s prevented by government rules.”

To date, Tesla has declined to issue these compliance letters for owners. Some other manufacturers set their own criteria for issuing these letters. For example, Fiat Chrysler will only issue a compliance letter if the vehicle owner has had the vehicle registered in their name for at least six months prior to the immigration or move. It’s common for vehicle manufacturers to require that owners provide information (such as job offer letters, visas) supporting the fact that they are trying to move the car to accommodate a change in their life circumstances, and are not engaged in cross-border shopping.

While not frequent, the Canadian dollar can fluctuate heavily against the US dollar. If individuals could freely cross-border shop for cars, these currency fluctuations could introduce chaos into the car market. Tesla would be less affected than other carmakers because without dealers they can dynamically price their new car sales in Canada to match US prices (where the cars are made). But used Tesla prices would be affected just like all other brands.

In 2007, the Canadian dollar soared above the USD, reaching $1.08 US, wreaking havoc on car sales in the country as Canadians attempted to buy cars in the US. Currently, a Canadian dollar is about 3/4ths of a US dollar, worth $0.76.

Electrek’s Take

There’s no question that when people move across the border due to change in life circumstances, they should be able to bring their car with them if it meets the local safety requirements. In that sense, this move is very welcome by Tesla. But the extent to which Tesla should enable cross-border shopping is an interesting debate.

We all like consumer freedom, but we also like price stability and predictable appraisals of future value for our vehicles. Cross-border shopping introduces the risk and uncertainty of potentially rapid currency fluctuations. If the Canadian dollar shot back up over the USD and any Canadian could buy a Tesla in the southern US (unaffected by Canadian weather) and road trip back, it’s safe to say the market for used Canadian Teslas would dry up. Conversely if the Canadian dollar crashes again, the market for Teslas in the US could be affected as Americans headed north to buy. Lots to think about.