Canadian Court Rules in Tesla's Favor Over Phase-Out of EV Incentives

Tesla buyers were originally excluded because the automaker did not sell its vehicles through a dealership.

via Getty Images

Tesla's plan to take on the Canadian government after it excluded the automaker's vehicles in a manner that it described as causing "substantial harm," has succeeded. In a ruling against Ontario's decision to append the terms of its provincial Electric and Hydrogen Vehicle Incentive Program (EHVIP) earlier this year, Ontario Superior Court Judge Frederick Myers deemed the terms of the transition program was discriminatory towards Tesla.

Initially, Canadians living in the province were entitled to a rebate of up to $14,000 CAD ($10,800 USD) on eligible electric and hydrogen-fueled cars as long as the price of the vehicle remained under $75,000 CAD ($58,000 USD). That abruptly changed in July when Doug Ford, brother of former Toronto mayor Rob Ford, deemed it necessary to effectively end to EHVIP.

The rebate program's initial terms would be discontinued effective immediately, and the program abolished in its entirety by September 10th, only two months after the program was announced to end. Additionally, in order for residents to qualify for the incentive, a new stipulation was put in place: customers must purchase a qualifying Electric Vehicle (EV) from a dealership. Naturally, Tesla's sales model would immediately disqualify its customers from eligibility due to its direct-to-customer sales model.

A debate ensued and Tesla found its only resolution to be through litigation, a case which was won on Monday in a Canadian Superior Court.

"The [Government of Ontario's] asserted rationale for limiting the transition program to franchised dealerships is laden with factual assumptions that were susceptible to being proved or disproved with evidence," Wrote Judge Myers in his ruling, according to Global News. "If the government wants to transition out of the electric car subsidy program, the [minister of transportation] must exercise his operational discretion in a lawful manner. He has yet to do so. I therefore quash and set aside the minister’s unlawful exercises of discretion to implement the transition program announced."

Furthermore, the court continued by accosting Ford's Minister of Transportation, John Yakabuski, for singling out Tesla in a blatant attempt to cause harm without due process. Tesla was happy with the outcome of the complaint and issued the following statement to The Drive:

“We’re pleased with the Court’s decision to strike down the Ministry’s transition plan as unfair and unlawful. Tesla only sought fair treatment for our customers and we hope the Ministry now does the right thing by delivering on its promise to ensure all EV owners receive their incentives during the wind-down period.”

At this time, no change to the phase-out process will be made. The provincial officials are planning to review the decision of the case and will investigate how it plans to proceed in the coming days.