The Canadian government has frozen $43 million in electric vehicle (EV) rebate payments owed to Tesla and declared the automaker ineligible for all future iZEV (Incentives for Zero-Emission Vehicles) programs, citing a combination of trade tensions and concerns over potential misuse of the program.
The decision was confirmed by Chrystia Freeland, who was recently appointed as Transport Minister. According to Freeland, the freeze was ordered before the election was called, and payments will remain suspended until every claim submitted by Tesla is reviewed individually.
“No payments will be made until we are confident that the claims are valid,” said Freeland in a statement to the Tornoto Star. “I also directed my department to change the eligibility criteria for future iZEV programs to ensure that Tesla vehicles will not be eligible for incentives so long as the illegitimate and illegal U.S. tariffs are imposed against Canada.”
The move comes in response to a last-minute surge in rebate claims submitted by Tesla in the final days of the iZEV program. According to government data, Tesla filed thousands of claims in just 72 hours that exhausted the remaining funds in the program nearly overnight. While many are claiming Tesla abused the program, the more likely scenario is that Tesla rushed to file claims for cars it had already sold, but not yet sought the rebate.
More than 200 independently owned Canadian dealerships were left out of pocket by approximately $10 million, having already advanced rebates to customers with the expectation of government reimbursement. Freeland’s office confirmed that these dealers would still receive these rebates, regardless of the outcome of the investigation into Tesla’s claims.
Provinces including Manitoba, Nova Scotia, and as of today, Prince Edward Island have already removed provincial EV rebates for Tesla vehicles.
