Elon Musk’s Tesla accused of taking advantage of Canada EV rebate scheme

The Canadian Automobile Dealers Association (CADA) and other industry players have argued that Elon Musk's Tesla registered a large batch of vehicles right before the Canadian government cut off rebates for pricier EVs.

According to media reports, Tesla reportedly claimed around $90 million in subsidies just before the Canadian government ended the iZEV (incentives for zero-emission vehicles) programme for costlier EVs.

The iZEV programme was introduced in 2019 by Transport Canada to encourage EV adoption. It provided up to $3,500 in rebates at the point of sale for eligible electric and plug-in hybrid vehicles. The programme was designed to encourage EV adoption, but Tesla managed to secure a huge chunk of the remaining funds by registering a massive batch of vehicles right before the deadline.

Now, over 200 Canadian car dealers are upset, arguing that Tesla exploited the system, leaving little to no rebate money for other manufacturers and customers. They’re calling for an investigation, saying Tesla’s move was unfair and went against the spirit of the programme.

According to the Toronto Star, dealerships had to cover about $6.91 million in rebates for over 2,000 customers, expecting reimbursement from the government — only to find that the programme had ended.

Dealers argue that if Tesla had advance knowledge, they were able to rush through registrations and claim millions in rebates, while traditional dealerships got blindsided. Now, many of these dealerships are stuck footing the bill for customers who expected to get their rebates.

On the flip side, Tesla’s defenders argue that the company simply played by the rules and took advantage of a legal opportunity before the window closed.

Tesla has always been aggressive in leveraging EV incentives, but this situation has sparked calls for an investigation. If it turns out that Tesla had no special access and just moved faster than everyone else, then it’s a case of smart business strategy. However, if the company was tipped off ahead of time, it could raise legal and ethical concerns about government favouritism.

Calling the situation "unacceptable", Canadian transport minister Anita Anand said the government is taking up the matter seriously. However, the question remains as to whether the federal government will step in to compensate these dealers or investigate Tesla’s rebate claims. If the government doesn’t act, it could damage trust in future EV incentive programmes.