Ottawa Freezes Tesla’s $40M Aid Package Amid ‘Subsidy Exploitation’ Allegations

The Canadian government slammed the brakes on Tesla this week, freezing approximately $40-43 million in aid payments amid accusations the electric vehicle giant deliberately exploited the country’s green car rebate program.

Transport Minister Chrystia Freeland ordered the payment halt after Tesla allegedly flooded the system with thousands of claims in just 72 hours.

Talk about gaming the system. Tesla submitted a whopping 8,700 rebate applications in a single weekend, draining about 60% of the remaining funds in Canada’s Incentives for Zero-Emission Vehicles program.

Tesla grabbed 60% of Canada’s remaining EV rebate money in just one weekend. Talk about a subsidy shopping spree.

One Quebec City dealership alone reportedly claimed nearly $20 million by documenting over 4,000 sales. In a weekend. Seems legit.

The government isn’t just sitting on the cash. They’ve launched a full-scale investigation to verify each $3,700 claim before releasing a dime.

And Tesla’s punishment doesn’t stop there. Transport Canada has been directed to revise eligibility criteria, effectively banning Tesla from future iZEV programs while certain U.S. tariffs remain in place on Canadian goods.

The timing is interesting. This all went down just before a federal election announcement. Nothing motivates political action like an upcoming vote, right?

Meanwhile, over 200 independent Canadian dealers are caught in the crossfire. They’ve already passed roughly $10 million in rebates to customers but can’t access the funds themselves. Thanks, Tesla.

The company’s strategy apparently involved adjusting Model Y prices to guarantee eligibility for the incentives. Clever. But not clever enough to avoid getting caught.

Beyond the immediate financial hit, Tesla faces significant reputational damage in the Canadian market. The government specifically cited “illegitimate and illegal U.S. tariffs” as part of its reasoning for the crackdown.

Angry Canadians have staged protests outside dealerships across the country, with many Tesla owners publicly distancing themselves from CEO Elon Musk.

Since 2019, Tesla has received a staggering $713 million in Canadian EV subsidies, making them the biggest beneficiary of the program by far.

The incident has sparked broader questions about EV subsidy structures and fair allocation of public funds.

This controversy erupts even as clean energy investments globally reach record levels, with renewable energy attracting $1.70 for every dollar invested in fossil fuels.

Ontario has already ended incentives for Teslas used as taxis or rideshares due to the same trade tensions. Looks like Tesla’s subsidy party in Canada is officially over.