Tesla Canada Sues Province of Ontario for Abruptly Cancelling EV Incentive Program

The EV maker alleges "substantial harm," lost sales, and unfairly penalized customers.

James Lipman/Tesla

Tesla's Canadian arm is suing the government of Ontario after the province canceled its Electric and Hydrogen Vehicle Incentive Program (EHVIP) back in July, according to the CBC. The lawsuit alleges "substantial harm" and lost sales as a result of the decision.

The incentive, which was first introduced by Ontario's former Liberal government, promised rebates of up to $14,000 CAD (or $10,650) on eligible green cars worth up to $75,000 CAD ($57,000 in U.S. bucks). However, the newly established Ontario premier Doug Ford—the brother of late, former Toronto mayor Rob Ford, abolished the program last month.

After the rebate program was thrown out, however, the province offered a grace period of sorts, extending the rebate to Ontarians who had an eligible vehicle delivered, registered, plated, and purchased from a dealer before Sept. 10. Since Tesla sells its cars directly rather than through traditional dealers, the program's abrupt cancellation presented quite the predicament for hundreds of prospective Model 3 owners who had already plunked down cash deposits with the expectation of a sizeable government rebate.

Tesla Canada's lawsuit says Ontario's move to scrap EHVIP unfairly targets its customers who are now effectively on the hook for another $10,000 while prospective owners of EVs sold in old-school dealerships such as the Chevy Bolt or Nissan Leaf still have until September to get their subsidized purchases in. The company argues that the government "deliberately, arbitrarily," and without warning, excluded Tesla customers from the grace period and Tesla itself from providing any input on the decision, reports the CBC.

From the lawsuit: "The Minister of Transportation's decision suddenly left hundreds of Tesla Canada's Ontario customers in the unfair position of no longer being eligible for the rebate they had expected to receive when they ordered their vehicles. While purchasers of other brands and from other dealers will still receive the rebate during the transition period."

It's unclear what Tesla Canada's policy is on refunding deposits to customers who may no longer be able to afford a Model 3 without the rebate, but Global News apparently spoke to one Mississauga man who was able to get his money back. Others, however, are still unsure. "My wife and I are still not sure if we are going to take delivery without the rebate… we are not millionaires," a Toronto Model 3 customer told Global

The Drive has reached out to Tesla for clarification and further comment and will update this story when we get a response.