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Tesla Giga Canada makes sense: Canadian Minister emphasizes auto industry’s new “supplier of choice” [Opinion]
Tesla Giga Canada is starting to make more sense. At the 2022 Shareholders Round-Up, Elon Musk announced that Tesla might share the location of its next gigafactory by the end of the year. Musk teased that Canada could be a potential location.
Just last week, Canada’s Minister of Innovation, Science, and Industry François-Philippe Champagne visited Tesla’s Markham facility to talk to Tesla. Champagne’s visit suggested that Tesla Giga Canada has some potential to reach fruition.
There are two main reasons Canada would be a good location for Tesla’s next gigafactory. CDN seems to be hyper-focused on developing its green supply chain and catering to the auto industry. Also, the recently signed Inflation Reduction Act encourages automakers—legacy and startup alike—to secure supply chains in North America.
Canada becoming EV “supplier of choice”
Recently, Volkswagen and Mercedes Benz signed separate agreements with Canada for battery EV materials.
Volkswagen’s deal with Canada involves sustainable battery manufacturing, cathode active material production, critical mineral supply, and others. It also includes a Canadian office for VW’s PowerCo, its battery company. Through PowerCo, Volkswagen plans to develop and research EV batteries and ramp in-house cell production and recycling.
Canada’s agreement with Mercedes Benz seems more open-ended. However, it will focus on enhancing collaborations between the legacy OEM and Canadians companies along EV and battery supply chains.
Minister Champagne explained that talks between Canada and the two legacy automakers started in May when he visited Germany.
“Canada is quickly becoming the green supplier of choice for major auto companies, including leading European manufacturers, as we transition to a cleaner, greener future. By partnering with Volkswagen and Mercedes, Canada is strengthening its leadership role as a world-class automotive innovation ecosystem for clean transportation solutions. Canada is committed to building a strong and reliable automotive and battery supply chain here in North America to help the world meet global climate goals,” said Champagne.
The 2022 Inflation Reduction Act
VW and Mercedes Benz signed deals with Canada a week after President Joe Biden signed the Inflation Reduction Act, and it doesn’t seem to be a coincidence.
The Inflation Reduction Act takes effect in December 2022, but EV automakers and suppliers have already started preparing for it. For instance, South Korean battery suppliers have also started preparing to move production to the United States. The law introduces a new system of EV tax credits with a specific set of requirements. It includes a battery requirement that would affect automakers and suppliers directly.
Under the Inflation Reduction Act, 40% of materials used in batteries should be sourced from North America or a U.S. trading partner by 2024. By 2029, 100% of materials used in batteries should come from North America or U.S. trading partners; otherwise, the vehicles will not qualify for EV tax credits.
The law would affect automakers like Volkswagen. VW, for instance, aims to break into the U.S. pickup truck market with an all-electric Scout vehicle. EV tax credits would help VW’s EV Scout sales in the future.
What about Tesla?
The U.S. Department of Energy’s Alternative Fuels Data (DOE) published a list of electric vehicles eligible for the new EV tax credit of $7,500. According to DOE’s list, Tesla’s entire S3XY line will qualify for the tax credits starting January 1, 2023.
Tesla hasn’t qualified for EV tax credits for quite some time since it already hit the 200,000 cap in the old system. The strong demand for Tesla cars suggests that the lack of subsidies isn’t really hurting the company. But, EV tax credits would help the company’s primary goal: accelerating the advent of sustainability.
Tesla has become a leader in the global EV space and market. It has shown legacy automakers that electric vehicles are the future. To keep traditional OEMs motivated, Tesla needs to keep pushing forward. Complying with the Inflation Reduction Act would be a good way of keeping legacy OEMs on their toes.
Tesla’s aims to produce 20 million vehicles annually by 2030. Elon Musk explained that Tesla would need about a dozen gigafactories to make 2 million vehicles per year and achieve its 20M goal.
Currently, Tesla has Giga Texas, Giga Berlin, Giga Shanghai, and the Fremont Factory producing cars. It would make sense for Tesla to choose Canada as the next location of its newest gigafactory given the Inflation Reduction Act’s requirements. By choosing Canada, Tesla could produce more cars and qualify for the EV tax credits in the United States–hitting two birds with one stone.
The Teslarati team would appreciate hearing from you. If you have any tips, contact me at maria@teslarati.com or via Twitter @Writer_01001101.
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Tesla earns top honors at MotorTrend’s SDV Innovator Awards
MotorTrend’s SDV Awards were presented during CES 2026 in Las Vegas.
Tesla emerged as one of the most recognized automakers at MotorTrend’s 2026 Software-Defined Vehicle (SDV) Innovator Awards.
As could be seen in a press release from the publication, two key Tesla employees were honored for their work on AI, autonomy, and vehicle software. MotorTrend’s SDV Awards were presented during CES 2026 in Las Vegas.
Tesla leaders and engineers recognized
The fourth annual SDV Innovator Awards celebrate pioneers and experts who are pushing the automotive industry deeper into software-driven development. Among the most notable honorees for this year was Ashok Elluswamy, Tesla’s Vice President of AI Software, who received a Pioneer Award for his role in advancing artificial intelligence and autonomy across the company’s vehicle lineup.
Tesla also secured recognition in the Expert category, with Lawson Fulton, a staff Autopilot machine learning engineer, honored for his contributions to Tesla’s driver-assistance and autonomous systems.
Tesla’s software-first strategy
While automakers like General Motors, Ford, and Rivian also received recognition, Tesla’s multiple awards stood out given the company’s outsized role in popularizing software-defined vehicles over the past decade. From frequent OTA updates to its data-driven approach to autonomy, Tesla has consistently treated vehicles as evolving software platforms rather than static products.
This has made Tesla’s vehicles very unique in their respective sectors, as they are arguably the only cars that objectively get better over time. This is especially true for vehicles that are loaded with the company’s Full Self-Driving system, which are getting progressively more intelligent and autonomous over time. The majority of Tesla’s updates to its vehicles are free as well, which is very much appreciated by customers worldwide.
Elon Musk
Judge clears path for Elon Musk’s OpenAI lawsuit to go before a jury
The decision maintains Musk’s claims that OpenAI’s shift toward a for-profit structure violated early assurances made to him as a co-founder.
A U.S. judge has ruled that Elon Musk’s lawsuit accusing OpenAI of abandoning its founding nonprofit mission can proceed to a jury trial.
The decision maintains Musk’s claims that OpenAI’s shift toward a for-profit structure violated early assurances made to him as a co-founder. These claims are directly opposed by OpenAI.
Judge says disputed facts warrant a trial
At a hearing in Oakland, U.S. District Judge Yvonne Gonzalez Rogers stated that there was “plenty of evidence” suggesting that OpenAI leaders had promised that the organization’s original nonprofit structure would be maintained. She ruled that those disputed facts should be evaluated by a jury at a trial in March rather than decided by the court at this stage, as noted in a Reuters report.
Musk helped co-found OpenAI in 2015 but left the organization in 2018. In his lawsuit, he argued that he contributed roughly $38 million, or about 60% of OpenAI’s early funding, based on assurances that the company would remain a nonprofit dedicated to the public benefit. He is seeking unspecified monetary damages tied to what he describes as “ill-gotten gains.”
OpenAI, however, has repeatedly rejected Musk’s allegations. The company has stated that Musk’s claims were baseless and part of a pattern of harassment.
Rivalries and Microsoft ties
The case unfolds against the backdrop of intensifying competition in generative artificial intelligence. Musk now runs xAI, whose Grok chatbot competes directly with OpenAI’s flagship ChatGPT. OpenAI has argued that Musk is a frustrated commercial rival who is simply attempting to slow down a market leader.
The lawsuit also names Microsoft as a defendant, citing its multibillion-dollar partnerships with OpenAI. Microsoft has urged the court to dismiss the claims against it, arguing there is no evidence it aided or abetted any alleged misconduct. Lawyers for OpenAI have also pushed for the case to be thrown out, claiming that Musk failed to show sufficient factual basis for claims such as fraud and breach of contract.
Judge Gonzalez Rogers, however, declined to end the case at this stage, noting that a jury would also need to consider whether Musk filed the lawsuit within the applicable statute of limitations. Still, the dispute between Elon Musk and OpenAI is now headed for a high-profile jury trial in the coming months.
News
Tesla Giga Shanghai celebrates 5 million electric drive unit milestone
The milestone was celebrated by the company in a post on its official Weibo account.
Tesla China has reached another manufacturing milestone at Gigafactory Shanghai, rolling out the facility’s 5 millionth locally produced drive unit.
The milestone was celebrated by the company in a post on its official Weibo account. In its post, the Giga Shanghai team could be seen posing with the 5 millionth drive unit.
Giga Shanghai’s major benchmark
The milestone drive unit was produced at Gigafactory Shanghai, which produces the Model Y and the Model 3. In a release, Tesla China noted that its three-in-one integrated electric drive system combines the motor, gearbox, and inverter into a single compact assembly. This forms a powerful “heart” for the company’s electric cars.
Tesla China also noted that its drive units’ integrated design improves energy conversion efficiency while reducing overall weight and complexity, benefits that translate into stronger performance, improved handling, and longer service life for its vehicles.
The new milestone builds on earlier achievements at the same site. In July 2024, Tesla announced that its 10 millionth electric drive system globally had rolled off the line at the Shanghai plant, making it the first self-produced Tesla component to reach that volume.
More recently, the factory also produced its 4 millionth China-made vehicle, a Model Y L. The factory has also continued hitting global production milestones, rolling out Tesla’s 9 millionth EV worldwide late last year, with the landmark vehicle being a Tesla Model Y.
Tesla China’s role
Construction of Giga Shanghai began in January 2019, with production starting by the end of that year. This made it the first wholly foreign-owned automotive manufacturing project in China. The facility began delivering Model 3 vehicles locally in early 2020 and added Model Y production in 2021. The plant is now capable of producing about 1 million vehicles annually.
Throughout 2025, Giga Shanghai delivered 851,732 vehicles, representing a 7.08% year-on-year decline, according to data compiled by CNEVPost. Even so, recent months showed renewed momentum.
In December alone, Tesla China recorded wholesale sales of 97,171 vehicles, including domestic deliveries and exports, making it the company’s second-best monthly total on record, per data from the China Passenger Car Association. Retail sales during December reached roughly 94,000 units, up about 13% year over year.
Tesla earns top honors at MotorTrend’s SDV Innovator Awards
Judge clears path for Elon Musk’s OpenAI lawsuit to go before a jury
