Tesla will reportedly export a Chinese-made Model Y variant to Canada this year, which would mark the first time it ships cars to North America from China.

In an exclusive report, Reuters cites as sources a person with direct knowledge of the plan and a production memo the news agency has seen. If the information is correct, the move would connect Tesla's biggest and most cost-efficient factory in the world to North America, its largest market. The Model Y is Tesla's best-selling model globally.

The new Model Y variant believed to be imported from China is the LFP battery-powered Model Y RWD, which surfaced on Tesla's Canadian website over the weekend.

Tesla's Gigafactory Shanghai began production of the Canada-bound Model Y RWD earlier this month, the person with knowledge of the development said. According to the Giga Shanghai production memo reviewed by Reuters, vehicles had been designed and tested for export to North America, with production target of nearly 9,000 this quarter.

While Tesla did not respond to a request for comment, this is not the first time the EV maker is rumored to consider plans for exporting made-in-China vehicles to North America.

Gallery: 2021 Tesla Model Y

In November 2022, Reuters reported just that, but Tesla CEO Elon Musk dismissed the report in a tweet at the time by labeling it "false," without elaborating.

Tesla Canada introduced the Model Y RWD on its website over the weekend priced $7,400 (10,000 Canadian dollars) lower than the Model Y Long Range. The new variant is listed with a delivery timeline between May and July.

The Canadian government's website was also updated on Friday to show that the new version of the Model Y and the more expensive long-range variant both qualify for incentives of approximately $3,700 (5,000 Canadian dollars) on purchase or a four-year lease.

According to Tesla's website, the Canada-specific Model Y RWD has an EPA-rated range equivalent to 245 miles (394 km) on a charge. The entry-level Model Y version sold in the US has an EPA-rated range of 279 miles, despite offering standard all-wheel drive.

Tesla's Shanghai plant uses lithium-iron phosphate (LFP) batteries for the Model Y version produced there for sale in China and for export to Europe and other markets.

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