Canada Cuts Tesla from EV Rebates Amid Trade War with US

By Staff, Agencies

The Canadian government has banned Tesla from its federal electric vehicle [EV] rebate program and frozen all pending rebate payments to the company.

Transport Minister Chrystia Freeland confirmed the move on Tuesday, citing concerns over "illegitimate and illegal US tariffs" imposed on Canada.

The decision follows allegations that Tesla exploited the iZEV rebate program, with reports of an unusual surge in Tesla sales in British Columbia just before the policy was paused.

In Quebec City, a single Tesla dealership reportedly claimed nearly CAD $20 million in public subsidies in one weekend, prompting an official investigation.

Several Canadian provinces, including British Columbia, Nova Scotia, and Manitoba, had already barred Tesla from their regional EV incentive programs.

Additionally, British Columbia’s power utility, BC Hydro, has stopped offering rebates for Tesla chargers and batteries, while Toronto has ended financial incentives for Tesla vehicles used as taxis or rideshares.

The ban comes amid escalating trade tensions between Canada and the US since Donald Trump’s return to office in January.

His administration imposed a 25% tariff on Canadian and Mexican imports, leading Canada to retaliate with countermeasures, including restrictions on Tesla.

The situation worsened after Trump controversially remarked that he could use "economic force" to turn Canada into the US's 51^st state.