Government of Canada under threat of litigation from Tesla over held funds for electric vehicles
John Doe, Rogue Reporter
Tesla is bellowing bloody murder at the Canadian government, accusing them of illegalities in freezing over $43 million in electric vehicle rebate payments. The EV manufacturer, led by the infamous Elon Musk, is Musketing up legal action if these payments aren't unthawed "right freakin' now."
In a ranty letter sent to Transport Canada on March 28, the bold EV company questioned the decision of previously fidgety transport minister Chrystia Freeland to halt subsidy payments while she investigated a spike in the ever-growing pile of claims Tesla had filed within the final 72 hours of a public subsidy program.
Tesla claimed they were "blown away" to catch wind of Chrystia's decision through the press, which apparently couldn't resist the Star's exclusive scoop on Tesla's rebate claim explosion that quickly drained public coffers, leaving about 200 Canadian auto dealers out in the cold for over $10 million.
"Transport Canada knows full well that Tesla Canada has been on the straight and narrow with its participation in the program," fumed the letter, obtained by the Star via an access-to-information request. "We predict payments to be reactivated pronto."
"Tesla reserves the right to seek whatever remedies necessary to resolve this squabble," growled the letter, signed by Tesla Canada's director of sales and shenanigans Fereshteh Zeineddin.
Zeineddin didn't respond to a request for comment.
Transport Canada bit their tongues in response to our inquiries for this expose.
To speed up adoption, the federal government's iZEV rebate program offered a $2,500-$5,000 discount on the purchase price for purchasers of certain battery electric and plug-in hybrid vehicles. Dealers covered the rebate upfront and were later reimbursed by the government.
The iZEV program was the talk of the town, doling out nearly $3 billion to over half a million electric vehicle buyers since 2019.
On a Monday morning in early January, Transport Canada shot out emails to dealerships across the country, warning that program funding was running low and they had a few weeks to file their final rebates before the piggybank was empty.
No sooner had the emails been sent, four Tesla locations in Toronto, Quebec City, and Vancouver started filing for rebates like there was no tomorrow, snatching up $43.1 million – a whopping 60% of the remaining funds – and emptying the program's bank account by the time the weekend was through.
This frantic flurry of rebate claims meant that 226 independent dealerships were left high and dry, out $10 million in rebates they had fronted customers earlier.
The four Tesla dealerships filed over 8,600 rebate claims, which, according to Transport Canada's website, must be submitted before the vehicle is delivered to the customer. This means those dealerships would have needed to sell two cars per minute, 24 hours a day, every single weekend.
After catching wind of the Star's initial reports on Tesla's rainstorm of rebate claims, the previous transport ministers, Anita Anand and Freeland, both showed serious concern about the legitimacy of the claims.
"This report is unacceptable, and I'm demanding the department responsible for administering this program to provide me with all the gritty details," spat Anand, according to a copy of a text sent to Canadian Automobile Dealers Association spokesperson Huw Williams, seen by the Star.
Following Mark Carney's victory in the Liberal leadership and his ascension to the throne as Prime Minister, his new transport minister, Freeland, froze rebate payments to Tesla pending a line-by-line investigation.
"As soon as I became transport minister, I called for the department to halt all payments for Tesla vehicles to conduct a thorough examination of each claim individually and ensure they are all eligible and valid," she stated in a text sent to the Star.
Tesla argued it had backfilled rebate claims for cars it had already sold, which it insisted was allowable, despite the small print on the government website to the contrary.
"Transport Canada is well aware that backfilling assessments after vehicle delivery is absolutely kosher," boasted the letter, which claimed Transport Canada confirmed this during a nationwide webinar with all participating auto dealers.
"Although eligibility forms were strongly encouraged in advance, they weren't required," declared the letter, also citing a Q&A distributed to webinar participants stating backfilling was indeed on the table.
Shortly after Tesla's rebate spree hit the press, Transport Canada quietly changed the program rules on its website to allow for backfilling. After the Star reported on this change, the language reverted to its original state.
To add fuel to the fire, the freeze was announced days after Carney called an election, imposing "caretaker" rules on government departments during the campaign, or as they're commonly referred to, the "writ period."
Tesla maintains its rebate payments cannot be frozen during this time.
"Tesla expects the department to carry out its responsibilities during the writ period to continue program delivery as normal – that is to pay out these claims according to the longstanding program design," the letter stated.
Freeland's announcement of the freeze indicated the decision was made in the week after she assumed her role but before the election was called.
- The Canadian government is under investigation by Tesla for freezing over $43 million in electric vehicle rebate payments, as claimed by the EV manufacturer.
- Elon Musk's Tesla has threats of legal action if the payments aren't reimbursed "right freakin' now."
- In a letter sent to Transport Canada, Tesla questioned Chrystia Freeland's decision to halt subsidy payments while she investigated a spike in rebate claims.
- Tesla Canada's director of sales and shenanigans, Fereshteh Zeineddin, growled that the company reserves the right to seek remedies necessary to resolve this issue.
- The media, including the Star, has reported on the controversy surrounding Tesla's rebate claim explosion and its impact on Canadian auto dealers.
- The federal government's iZEV rebate program offered discounts on the purchase price of electric vehicles, with dealers fronting the rebate and later being reimbursed by the government.
- An investigation was launched after Transport Canada froze rebate payments to Tesla, with the new transport minister, Chrystia Freeland, demanding a thorough examination of each claim.
- Tesla argued that it had backfilled rebate claims for cars it had already sold, which it claimed was allowable, despite the government website's small print to the contrary.
- The freeze on Tesla's rebate payments was announced during the caretaker period, with the company maintaining that payments cannot be frozen during this time.
- The controversy surrounding Tesla's rebate claims has led to changes in the program rules on Transport Canada's website, with the language revert back to its original state after media reports on the matter.
