Tesla applied for over $43 million in electric vehicle rebates, but Canadian authorities revoked the company’s eligibility instead.
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Tesla is entering its “find out” era in Canada.
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The Canadian authorities are looking into a request from Tesla for $43.1 million CAD ($30 million USD) in electric vehicle purchase incentives within only three days.
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Canadian authorities have likewise prohibited Tesla from receiving iZEV incentives until the U.S. removes its tariffs.
Tesla is a powerhouse in the realm of electric vehicles from America, having played a key role in promoting EV usage worldwide through groundbreaking innovations—a process that has occasionally led them into conflicts with regulators. Their most recent controversy involves running afoul of some regulatory standards.
All of the Canadian government
.
In light of a multimillion-dollar participation in Canada’s publicly funded electric vehicle incentives scheme, along with CEO Elon Musk’s political interventions and looming additional U.S.-imposed tariffs set to affect Canadian products as soon as the following week, the nation has reached its limit. Consequently, payments under these initiatives have halted entirely, and Tesla has been specifically barred from participating in any upcoming federal government subsidy schemes in Canada—for the time being.
The Great Rebate Grab
The
last straw
It was an uncertain assertion amounting to over $43.1 million CAD ($30 million USD) in electric vehicle (EV) incentives submitted shortly after Transport Canada revealed that funds for the nation’s Incentives for Zero-Emission Vehicles (iZEV) initiative were nearly depleted. Certainly, this figure stands significant.
lot
Of money. However, it wasn’t merely the sum that raised concerns; it was the volume.
The demands equated to Tesla having sold 8,653 electric vehicles over a single weekend at only four Canadian dealerships. Essentially, this would be like selling one vehicle every 30 seconds non-stop for 72 hours straight.
Either Tesla’s sales force pulled off the planet’s biggest continuous sale, or some shady dealings were happening—this is what caught my attention.
The Canadian Automobile Dealers Association claims
, anyway. And it’s enough to draw the attention of Canadian officials who have since frozen the payments to the American automaker.
“As soon as I became Transport Minister, I asked the department to stop all payments for Tesla vehicles in order to fully examine each claim individually and determine whether all are eligible and valid,” said former Transport Minister, Chrystia Freeland, in a statement to the
Toronto Star
. “No payments will be made until we are confident that the claims are valid.”
More than 200 individual dealership outlets are holding onto an approximately $10 million CAD ($7 million USD) fund after providing upfront financing to their clients under the expectation of reimbursement through the iZEV program. With the program halted, these dealers could not process 2,295 rebate claims, leading some to contemplate layoffs due to the anticipated funding now being at risk.
Freeland indicates that these dealers will eventually be fully compensated.
Gaming Canada: A Tesla Tradition
This isn’t Tesla’s first rodeo when it comes to playing fast and loose with incentive programs. Remember Tesla’s Canada-only compliance car? No? Well, let’s take a quick trip back in time to the beginning of the iZEV program.
To be eligible for the iZEV program in 2019, vehicles were required to adhere to numerous criteria. A key requirement involved the initial manufacturer’s suggested retail price (MSRP). For instance, the Tesla Model 3 with less than six seats had to have an entry-level price under $45,000 CAD. Nevertheless, prior to joining the iZEV initiative, Tesla listed the Model 3 SR+ at $52,990 CAD in Canada.
Here’s where the fun kicks in.
Tesla then launched its compliance model. For a cool $44,999 CAD—$1 less than the limit—buyers of the cheapest Model 3 became the proud owners of a car that could travel a whole 94 miles between charges. Keep in mind that Musk has previously said that 250 miles of range would be ”
unacceptably low
” for its vehicles.
The plus side is that SR+ buyers would also qualify for the iZEV credit. But the end result? Canadian taxpayers unwittingly subsidized Tesla purchases to the tune of $115 million CAD, but only because this compliance car existed.
Here’s some additional information about Tesla’s subsidies in Canada from the
Toronto Star
:
Tesla has received the largest portion of Canadian electric vehicle subsidies, totaling $713 million since 2019. This substantial uptake of public funds has irked many people, particularly as Musk pushes for significant cuts to U.S. governmental initiatives along with widespread firings of federal employees. Demonstrations against Tesla have occurred across the border, and incidents of vandalizing Tesla cars appear to be increasing.
Flavio Volpe, who leads Canada’s Automotive Parts Manufacturers’ Association, expressed his approval of the investigation.
Tesla took advantage of the iZEV program by introducing its China-produced vehicles to benefit from Canadian incentives, even as its CEO claimed ‘Canada is not a real country’ on X. It seems they have created their own predicament.
Politics, Politics, Politics
It’s not just
Tesla’s odd accounting
That sees Canada tightening its purse strings. The whole nation is weary of American politics at present, and Musk (who acts as the top ally) isn’t supporting the carmaker’s position.
His close rapport with U.S. President Donald Trump and his readiness to call Canada “not a real country”
In a now-removed posting on X
) has left the Canadian government hesitant to offer any concessions to the American automaker. Actually, Freeland states that Canada will guarantee Tesla remains entirely disqualified from any benefits.
any
upcoming iZEV programs in Canada until the U.S. reinstates tariffs on Canadian goods:
“I have instructed my department to modify the eligibility requirements for upcoming iZEV programs to make sure that Tesla vehicles do not qualify for these incentives as long as the unjustified and unlawful U.S. tariffs remain in place against Canada,” stated Freeland.
What we end up with? A scenario like no other.
Tesla
It unfolds more like a plot from a Netflix series rather than something you’d encounter in reality.Politicians are furious, the head of an automobile company is entangled in political maneuvers, car dealerships are losing substantial amounts due to a suspicious agreement, and customers who previously admired driving the electric vehicle with the most desirable logo are now shifting their allegiance away from the brand.
Canada used this as an opportunity not to just yank Tesla’s subsidy privileges—the entire country went full scorched-earth to make an example of the brand. Now Tesla is finding out that bending rules can have consequences, especially when the international spotlight is on a company figurehead who seems to be evaporating trust much more rapidly than it can be restored.
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