Canada has suspended all electric vehicle (EV) rebate payments to Tesla (NASDAQ: TSLA) and barred the company from future incentives under its iZEV program. Transport Minister Chrystia Freeland announced the freeze, citing the need to individually investigate every claim filed by Tesla. The move follows allegations that a Tesla dealership in Quebec claimed nearly C$20 million in subsidies by reporting over 4,000 EV sales in a single weekend.
A total of C$43 million ($30 million USD) in rebates for Tesla is now on hold. Freeland directed the transport department to revise future EV rebate eligibility to exclude Tesla as long as the U.S. maintains “illegitimate and illegal tariffs” on Canadian goods.
The decision comes as U.S. President Donald Trump announced sweeping new tariffs, including a 25% tax on Canadian and Mexican imports, set to take effect in early April. Trump also hinted that auto tariffs could be imposed soon, although not all will be enforced by April 2.
The rebate freeze and Tesla’s exclusion from future programs appear linked to the escalating trade dispute. Earlier this month, Toronto halted incentives for Tesla vehicles used as taxis or ride-shares due to the same tensions.
Tesla CEO Elon Musk, known for his close ties to Trump, is also leading the White House’s Department of Government Efficiency. Tesla has yet to comment on the situation.
The rebate suspension coincides with the upcoming Canadian federal election on April 28, adding a political dimension to the economic standoff. As trade relations continue to deteriorate, the fallout could significantly impact Tesla’s Canadian operations and EV adoption in the country.
This high-profile clash between Canada and Tesla underscores the broader implications of U.S. trade policy on cross-border business and sustainability initiatives.