Tesla has recently been cleared by Transport Canada in a high-profile investigation regarding its $43.2 million CAD EV rebate claims. The government found no evidence of fraud or wrongdoing, putting an end to months of speculation and controversy.
The investigation was launched earlier this year after Tesla submitted a staggering 8,653 claims for federal Incentives for Zero-Emission Vehicles (iZEV) rebates over a single weekend in January 2025. This sudden influx of claims came just hours after Transport Canada announced that the iZEV fund was nearly depleted.
It was revealed that four Tesla locations were responsible for nearly 89% of the weekend claims, with one Quebec City store alone submitting over 4,000 applications. In total, Tesla’s weekend claims amounted to over $43 million, representing more than half of the program’s remaining funds.
The sheer volume of claims raised suspicions of potential fraud, as critics argued that it was impossible for Tesla to process such a large number of applications in such a short timeframe. However, Tesla maintained that the claims were legitimate and tied to a backlog of deliveries that had already been completed. The company explained that the submissions were processed in bulk to ensure that buyers received their rebates before the program’s end.
Following a thorough investigation, Transport Canada validated Tesla’s explanation and confirmed that the claims were in line with program guidelines. As a result, Tesla’s previously frozen $43.2 million in rebate payments will now be released.
Despite being cleared of any wrongdoing, Tesla will reportedly be banned from participating in future iZEV programs. This decision is believed to be related to ongoing trade tensions and tariff-related disputes between the U.S. and Canada. Tesla had previously threatened to sue the federal government over the frozen funds.
On a positive note, Canada’s Environment Minister has confirmed that federal EV rebates will return, although specific details have not yet been provided. This news comes as a relief to Tesla, which has faced challenges in the Canadian market due to steep price hikes resulting from Ottawa’s tariffs on U.S.-made EVs.
In an effort to boost sales, Tesla recently announced a significant price cut for the Model Y Long Range AWD in Canada. The price reduction of $20,000 CAD is aimed at making the electric SUV more accessible to Canadian consumers, even undercutting pre-tariff levels by $5,000. This move is expected to attract more buyers and help Tesla regain its foothold in the Canadian EV market.