Tesla files legal challenge over Manitoba EV rebate ban

Tesla is preparing to take the Manitoba government to court after being removed from the province’s electric vehicle (EV) rebate program. The legal challenge bears a strong resemblance to a legal battle the automaker won against Ontario nearly a decade ago.

According to a letter sent by Tesla to the Manitoba government released on Friday, the company says it intends to seek a judicial review of the province’s decision to exclude Tesla vehicles from its EV rebate program for 2025 and 2026. The letter argues the decision was “procedurally unfair and undertaken for an improper purpose,” and claims the exclusion is inconsistent with the program’s stated objectives.

The dispute stems from a policy change announced by Manitoba in March 2025 as part of the province’s response to growing trade tensions between Canada and the United States. As Drive Tesla previously reported, the government removed Tesla vehicles from eligibility for rebates of up to $4,000 on new EV purchases and $2,500 on qualifying used EVs.

At the time, Finance Minister Adrien Sala said the move was part of Manitoba’s effort to “Trump-proof” the provincial economy and demonstrate an “elbows up” approach in response to U.S. tariffs. Notably, Tesla was the only U.S.-based automaker singled out for exclusion despite other American manufacturers continuing to qualify for the incentive program.

Now Tesla argues the province’s actions were politically motivated and unrelated to the original purpose of encouraging EV adoption.

Manitoba decision mirrors Ontario’s failed attempt

Tesla’s legal team is drawing direct comparisons to a similar case in Ontario in 2018. After the newly elected Ontario government cancelled its EV incentive program, it initially created a transition period allowing customers who purchased EVs through franchised dealerships to continue receiving rebates.

However, because Tesla sold vehicles directly to consumers rather than through traditional dealerships, many Tesla customers were effectively excluded.

Tesla challenged the decision in court, arguing the government had unfairly singled out the company. An Ontario Superior Court judge agreed, ruling the province’s treatment of Tesla was arbitrary and unlawful. The Ford government subsequently reversed course and allowed eligible Tesla buyers to receive the rebates before the program was ultimately phased out.

Other provinces could be next on Tesla’s list

Manitoba’s legal battle with Tesla could be just the beginning as several other provinces took similar action in 2025. British Columbia removed not only Tesla vehicles but also home chargers from its provincial rebate programs.

B.C. Premier David Eby was not shy to explain the reason for Tesla’s exclusion, saying during a press conference it was directly due to a personal dislike for Elon Musk.

When asked if only @Tesla would be removed from the BC rebate program (for EV chargers, Powerwalls, and inverters), or if other U.S.-based companies would be removed, as per the explanation on the rebate website, Premier David Eby said bluntly:

"Yeah, it's just for Tesla and… pic.twitter.com/NiIZ0tYSaj

— Drive Tesla 🇨🇦 (@DriveTeslaca) March 13, 2025

Meanwhile Nova Scotia and Prince Edward Island also excluded Tesla from their incentive programs, all of which was done due to escalating trade tensions with the United States

If Tesla is successful in Manitoba, the ruling could create a legal precedent that encourages challenges to similar provincial policies, particularly where governments singled out Tesla while leaving other U.S.-based automakers eligible for incentives.

Given Tesla’s successful 2018 court challenge against Ontario over a nearly identical issue, provinces that excluded the automaker for reasons unrelated to vehicle eligibility or program objectives could also soon find themselves in court.