Elon Musk‘s Tesla is facing financial setbacks in Canada after the government froze all rebate payments to the electric vehicle maker and barred it from future EV rebate programmes. Transport Minister Chrystia Freeland announced the move in response to tariffs imposed by US President Donald Trump, calling them “illegal.”
The Trump administration introduced a series of tariffs, with most taking effect in early April, that impose a steep 25% tax on the majority of goods from Canada and Mexico.
Canada to investigate Tesla’s rebate claims before approving them
The country has halted rebate payments totaling 43 million Canadian Dollars (nearly $30.11 million) to Tesla, according to the news agency Reuters. The decision was made just before Prime Minister Mark Carney announced a general election on April 28.
In an emailed statement sent to Reuters, Freeland noted that Canada won’t make any rebate payments to Tesla until each claim is investigated and determined to be valid. She has also directed the transport department to revise eligibility requirements for future iZEV programs. This revision ensures that Tesla vehicles are ineligible as long as “illegitimate and illegal US tariffs are imposed against Canada.”
Tesla submitted an unusually high volume of EV rebate claims during the programme’s final days in January, the report added. One Quebec City Tesla dealership allegedly secured nearly 20 million Canadian Dollars in public subsidies by logging over 4,000 electric vehicle sales in just one weekend.
The report also noted that, due to trade tensions with the US, Canada recently halted financial incentives for Tesla vehicles bought for use as taxis or ride-share services.
Recently, Trump also mentioned that automobile tariffs are on the horizon, though not every one of his previously threatened levies will be enforced on April 2.
