Tesla has not publicly responded to the allegations. Freeland, however, says even if those claims — which far exceed any normal sales activity — turn out to be legitimate, Tesla will be disqualified from future federal EV rebate programs pending a change of tune from the U.S.

“I also directed my department to change the eligibility criteria for future iZEV programs to ensure that Tesla vehicles will not be eligible for incentive programs so long as the illegitimate and illegal U.S. tariffs are imposed against Canada,” Freeland said.

Tesla is also being squeezed out of EV incentive programs in cities and provinces, including Toronto, Manitoba, British Columbia, and Nova Scotia, making it harder for new buyers to access rebates.

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Tesla has been the biggest recipient of Canadian EV rebates, claiming $713 million since 2019. This voracious appetite for government money has rankled many now that Musk has embarked upon radical cuts to U.S. government programs and mass layoffs of civil servants. Protests at Tesla dealerships have taken place on both sides of the border, while reports of vandalism of Tesla vehicles have proliferated.

Flavio Volpe, president of Canada’s Automotive Parts Manufacturers’ Association, welcomed the investigation.
“Tesla exploited the iZEV program by sneaking in its Shanghai-built product to soak up Canada incentives while its CEO declared ‘Canada is not a real country’ on X. Sounds like they made their bed.”

At the heart of the controversy around Tesla’s rebate surge is whether employees were simply back filing for EVs that had already been sold.

The Star reported Tuesday that the rules of the iZEV program were quietly changed in a way that would have allowed this. Previously, the rules posted online had required dealers to file for rebates before cars were delivered to customers.

Shortly after the story was published, the rules were restored to their original wording.

The Vickers family, who run two GTA Ford dealerships, say they are $80,000 out of pocket for EV rebates they provided to customers but weren’t able to file with the government due to the Tesla rebate surge.

Curtis Vickers said each claim involves lots of documentation and takes time.

“How Tesla was able to submit 8,653 claims in 72 hours is beyond me,” he wrote in an email to the Star.
While he’s glad the government is now looking into it, he said that’s not enough.

“We’ve given the rebates to legitimate customers in good faith thinking that we’d get reimbursed by the government,” he said.

“I can’t go back to the customers and say: ‘You owe me $5,000.’ They didn’t do anything wrong. Nor did we.”

Public perception of Tesla CEO Elon Musk is rapidly cratering as a growing number of Canadians express outrage over his close political ties to U.S. President Donald Trump and his own political views and actions. In November, polling found fewer than one in five Canadians said they trust Musk’s opinions on Canadian politics. That anger deepened after Trump suggested Canada should become the “51st state” and threatened sweeping tariffs on Canadian goods — while Musk himself egged the president on, saying Canada is “not a real country.”

Across Canada, Tesla owners are finding themselves caught in the protest’s crossfire. In recent weeks, Tesla dealerships in Hamilton, Montreal, and Calgary have been vandalized. Calgary police are investigating two separate arson attacks on Tesla vehicles — both set on fire using accelerants. In Hamilton, as many as 80 Teslas were damaged in what officials are calling one of the largest car vandalism incidents in Canadian history. A Cybertruck owner in Victoria, B.C. complained to the Victoria News that he was seeing “at least three or four people giving me the middle finger every day.”

At the same time, a coordinated protest movement is gaining momentum. Demonstrations have cropped up in cities including Vancouver, Ottawa, and most recently, Kitchener.

The number of used Teslas listed on AutoTrader jumped 26.1 per cent last week compared to the same week last year, while the number of all other EVs declined by 3.1 per cent.

Critics of Musk and his company predict a mass movement of Tesla sales will drive down the cars’ cost and, therefore, the company’s stock price, reducing Musk’s wealth and thus, his ability to involve himself in politics. Even before taking an active role in the administration, Musk spent hundreds of millions of dollars to help Trump get elected.