by - In Canada, attention is focused on electric vehicle bonuses, which are moving towards Tesla after the strange sales growth.
- Until each sale related to bonuses is confirmed, Canada will not send Tesla money.
- It also banned Elon Musk’s brand from future subsidy programs as long as the US tariffs against it exist.
It was sometime this month when Tesla caused outrage among Canadian car dealers after selling an astounding 8,653 cars in just three days in four stores, equating to about two cars per minute over three consecutive days, including hours when the stores were closed.
All this happened before Canada’s electric vehicle bonus fund ran out of money. This combination of factors led officials to wonder if Tesla somehow played the system. Now the Canadian government is freezing payments to the electric car manufacturer led by US presidential adviser Elon Musk until everything is resolved. And that’s not all.
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Everyone suspected that as the funds in the electric car bonus program dwindled, sales would spike a bit. This would be great for Tesla, especially since it had problems selling cars earlier this year. But selling 8,653 cars in just three days? That’s not just a rise; it’s a bit of an alarm signal. Something was wrong here.
Freeze and Backlash with Tariffs
On Tuesday, Canadian Transport Minister Chrystia Freeland decided to freeze payments of 43 million Canadian dollars (equivalent to 30 million dollars at current exchange rates). “As soon as I became transport minister, I requested the department to stop all payments for Tesla vehicles to fully verify each application and determine if they are all eligible for the incentives,” Freeland noted in a statement for CTV News. “Payments will be suspended until we are sure that the applications are valid.”
But Freeland did not stop there.
“I also instructed my department to make changes to the eligibility criteria for future iZEV programs to ensure that Tesla vehicles will not be eligible for incentives as long as unjust and illegal US tariffs remain imposed against Canada,” she added.
So yes, she is not only refusing Tesla its monetary rewards until their legitimacy is resolved positively. She is creating a situation where buying a Tesla in the future will be less exciting in terms of pricing.
Bigger Game with Trump’s Tariffs
In fact, connecting this with the tariffs set by Trump slightly disempowers Elon Musk. Although the well-known leader may be close to the US president, he cannot independently stop the tariffs. At this stage, Trump is planning to continue. On his account, there have already been several retreats and fluctuations in his plans. He may need to rethink his strategy if Musk feels pressured.
Blow to Local Dealers
Back in Canada, Freeland also noted that the government will reimburse over 200 independent car dealers who were left short of about 10 million Canadian dollars after granting bonuses to customers without the possibility of obtaining reimbursement.
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Hugh Williams, a spokesman for the Canadian Automobile Dealers Association (CADA), welcomed the news.
“CADA was shocked that Tesla somehow allowed itself to … take $43 million in bonuses, while local dealers were left holding the bag, giving bonuses to customers on behalf of the federal government,” he stated to the Toronto Star. “Though the news of freezing Tesla’s payments pending investigation is positive news, this should have happened months ago,” he added.
It is worth noting that Elon Musk, who incidentally holds a Canadian passport and once caused a scandal by saying (and then deleting) that “Canada is not a real country,” has significantly benefited from Canadian electric vehicle bonuses. Since 2019, Tesla has accumulated $713 million in bonuses, making it the largest recipient of these benefits.
