Tesla Warns of Legal Action After Canada Freezes $30M in EV Rebates Due to Questionable Sales Allegations | Carscoops

      Tesla asserts that it did not genuinely sell 8.6K cars within three days; rather, its employees were merely submitting rebate applications for already sold EVs.

      Eight hours ago

      By Andreas Tsaousis

      Tesla reported selling 8,653 vehicles over three days and claimed C$43.1 million (approximately US$30M) in rebates just prior to the deadline.

      In response, Canada has paused the rebates while investigating whether Tesla manipulated the system.

      Tesla contends that these were backlogged orders, asserting that no unethical practices were involved and has hinted at potential legal action.

      That escalated quickly, didn’t it? This refers to Tesla's reply to accusations of selling an unusually large number of vehicles in Canada just before the country’s electric vehicle rebate program was set to conclude. Critics and officials are questioning whether these were legitimate sales or if the company was exploiting the system.

      What really transpired in Canada? In early March, it became known that four Tesla stores had sold 8,653 cars within just three days, claiming C$43.1 million (US$30M) in rebates. This suggests that, on average, each store sold 30 Teslas every hour, around the clock, even during times when they were supposed to be closed. If you buy that, I've got a bridge to sell you.

      Tesla Maintains Its Actions Were Above Board

      However, as reported by Electrek, in a letter dated March 28, Fereshteh Zeineddin, Tesla’s director of sales and service for Canada, stated that these rebate applications were routine and emphasized that Transport Canada, the agency overseeing the incentive program, should be aware of this.

      He clarified that a significant number of these rebates were for vehicles that had already been sold, but the dealers simply hadn't processed the paperwork yet. Therefore, the EV manufacturer claims it wasn't an unscrupulous practice on its part, but rather a matter of its staff prioritizing their tasks as the electric vehicle subsidy program was nearing its conclusion. According to the company, backlogged filings were permissible, so no wrongdoing was committed. Moreover, the funds in question would not directly benefit Tesla; instead, dealers would provide the incentives to customers and subsequently be reimbursed by the government.

      Frozen Rebates Must Be Resolved

      Tesla also expressed concern over Transport Minister Chrystia Freeland's decision to freeze the rebates "to thoroughly assess each claim individually and ascertain whether all are eligible and valid," as she mentioned to the Toronto Star. Tesla argued that this investigation has resulted in negative public perception towards its employees, who have faced verbal harassment, and if Transport Canada does not resume payments, the company may consider legal action.

      Until the investigation concludes, it remains unclear whether Tesla is being truthful; thus, it is presumed innocent until evidence indicates otherwise. Notably, however, the National Post reported that Tesla deliveries in Canada dropped approximately 70 percent between December 2024 and January 2025, making this abrupt increase quite unusual. If we had to speculate, this significant decline in sales and the instances of harassment might stem from Elon Musk becoming increasingly political, not just in the U.S. but wherever he deems fit, rather than being a consequence of Transport Canada’s inquiry.

      An Ironic Note on Musk and Canada

      In a related ironic twist, despite having a Canadian passport and living in Canada from 1989 to 1992, Musk recently tweeted that "Canada is not a real country," seemingly in response to Donald Trump's humorous suggestion of annexing Canada as the 51st state. Perhaps he's just teasing or testing how much diplomatic backlash he can provoke via social media.

      Regardless of the intent, the Canadian government appears unimpressed and is making it clear that Tesla’s C$43.1 million rebate claim will be scrutinized closely.