Canada investigates whether Tesla wrongfully helped itself to a subsidy-fueled sales boom
- Tesla sold about 8,600 cars in three days at four separate stores in Canada, or roughly one every two minutes per showroom, in January. That equates to roughly 18% of its annual volume for the market. Now, some $30 million in rebates to consumers have been frozen by Ottawa.
Canada is launching investigations into whether Tesla unlawfully gained business by securing $43 million CAD ($30 million USD) in government subsidies for its customers, freezing the disbursement of funds until the matter has been resolved.
In January, four showrooms in three major cities managed to sell 8,600 cars in the span of a just weekend following news that the country would no longer help fund part of the purchase price for a new electric car under its iZEV program.
While a spike was to be expected and Tesla orders are typically filed online rather than at a physical store, that nonetheless works out to be two cars every minute of every hour for three days straight. Moreover, according to Quebec-based Motor Illustrated, Tesla accounted for 89% of all claims filed during that period.
“No payments will be made until we are confident that the claims are valid,” said Transport Minister Chrystia Freeland in a statement to the Toronto Star.
Earlier this month, the Canadian daily first reported of the suspiciously high number of EV rebate claims in the final January days of the program. One dealership in Quebec City documented more than 4,000 vehicle sales over a single weekend.
“I also directed my department to change the eligibility criteria for future iZEV programs to ensure that Tesla vehicles will not be eligible for incentives so long as the illegitimate and illegal U.S. tariffs are imposed against Canada," the Ottawa-based Freeland added. Three provinces have also cancelled their local EV subsidies for Tesla.
Tesla did not respond to a Fortune request for comment.
A Canadian passport holder, Musk posted 'Canada is not a real state' before deleting it
Even were there no such cases of potential fraud, Tesla is an easy political target right now as CEO Elon Musk has been the public face of the Trump administration—not just in the U.S., but in Canada as well.
A key plank of Freeland’s failed bid to assume leadership of the center-left Liberals from the outgoing Justin Trudeau hinged on the threat of imposing 100% tariffs on Teslas.
Even though Musk’s mother was born in Saskatchewan and her side of the family hails from the country, Musk has fully supported Trump’s tariff attacks on the country as well as his overtures to woo Canada into joining the Union as the 51st state.
As a result, an official petition for parliament to examine stripping Musk of his Canadian passport has gathered steam. Musk responded to the effort by saying “Canada is not a real country,” before deleting the post.
For decades, there have been warm ties between the two North American neighbors, allies and trading partners, with open conflict between the two so remote it was the stuff of South Park parodies.
Yet within weeks of the Trump administration taking power, relations between Canada and the U.S. plummeted to an all-time low, and there has been little to no domestic pushback against Trump’s treatment of friendly governments.
Meanwhile, Canada’s toned-down version of Donald Trump, Conservative leader Pierre Poilievre, has seen his support slump amid a wave of newfound nationalism north of the border.
This story was originally featured on Fortune.com