Canada Suspends Tesla Rebates, Bars Automaker from Future EV Incentive Programs Over Tariffs
Canada has suspended all rebate payments to Tesla and banned the electric vehicle (EV) manufacturer from participating in future federal incentive programs, Transport Minister Chrystia Freeland announced on Tuesday.
In a statement shared by her office, Freeland said no rebates will be paid until each individual claim from Tesla is thoroughly investigated and verified as legitimate. She also directed the Department of Transport to revise the eligibility criteria for future Incentives for Zero-Emission Vehicles (iZEV) programs, explicitly excluding Tesla vehicles as long as “illegitimate and illegal U.S. tariffs are imposed against Canada.”
Tesla has not responded to a request for comment.
The move follows recent tariff actions by U.S. President Donald Trump, who has announced sweeping 25% duties on most goods from Canada and Mexico, set to take effect in early April. Trump has also hinted that automobile tariffs will be introduced soon, though not all proposed levies will be enforced as early as April 2.
According to the Toronto Star, Canada has frozen approximately C$43 million ($30.11 million USD) in rebate payments to Tesla. The order reportedly preceded Prime Minister Mark Carney’s announcement of a general election scheduled for April 28.
The Star also reported that Tesla filed an unusually large number of rebate claims in the final days of the program in January. A single dealership in Quebec City accounted for nearly C$20 million in public subsidy requests, citing over 4,000 EV sales during a single weekend.
Earlier this month, Toronto halted local financial incentives for Tesla vehicles used as taxis or ride-sharing vehicles, citing ongoing trade tensions with the United States.
Tesla CEO Elon Musk—an ally of President Trump—is currently serving as head of the White House’s Department of Government Efficiency, leading efforts to reduce the federal government’s size and budget.
