Tesla Accused of Exploiting Canadian EV Rebate Program

Tesla is once again in hot water — this time in Canada, where independent car dealers are accusing the company of playing fast and loose with government rebates. The controversy stems from the sudden end of the country's Incentives for Zero-Emission Vehicles (iZEV) Program in January, which left many dealers on the hook for an estimated $6.91 million in rebates that they expected would be reimbursed by the government.

A suspicious sales spike

The iZEV Program, launched in 2019 by Transport Canada, provided buyers of EVs and plug-in hybrids with rebates of up to $3,500. But after political turmoil led to the resignation of Prime Minister Justin Trudeau, Transport Canada abruptly announced on Jan. 10 that the program would run out of funds well before its scheduled end in March.

What happened next raised eyebrows. In the final days before the program shut down, four Tesla-owned dealerships in Canada filed claims for nearly 8,653 EV sales in just 72 hours — an astronomical number that would have been difficult, if not impossible, for them to fulfill.

One Quebec City Tesla showroom alone claimed it had sold over 4,000 cars in a single weekend, requesting more than $13 million in public subsidies. Independent dealers, who had to honor the rebates for customers expecting government reimbursement, say they are now out $6.91 million due to the unexpected cutoff of funds.

Did Tesla game the system?

Industry experts and Canadian officials are questioning the legitimacy of Tesla’s rebate claims. The numbers are staggering — many of the showrooms that reported thousands of sales don’t even have the physical capacity to store that many vehicles.

"Tesla had a run on the bank," Huw Williams, a spokesperson for the Canadian Automobile Dealers Association, told the Toronto Star. "Somehow, Tesla gamed the system. What we can’t figure out is how this could have happened without setting off alarm bells."

One theory is that Tesla dealerships may have pre-registered vehicles or filed rebates in backdated batches to maximize their claims before the program ended. A Transport Canada official told the Star, "Tesla didn’t sell those cars that weekend."

A troubling trend for Tesla in Canada

This latest controversy comes as Tesla’s fortunes in Canada appear to be worsening. Sales in the country reportedly dropped 70% between December 2024 and January 2025, amid CEO Elon Musk’s increasingly controversial public behavior and U.S. President Donald Trump’s trade war rhetoric against Canada.

The backlash against Tesla’s alleged rebate scheme is already gaining political attention. Canadian Transport Minister Anita Anand has called the situation "unacceptable" and requested a full investigation into the matter.

Final thoughts

For now, it remains unclear whether Tesla actually broke the law or merely exploited a loophole in the system. But with millions at stake and dealers waiting for answers, this is a scandal that isn’t going away anytime soon.