In a shocking turn of events, Canada has officially banned Tesla from its federal electric vehicle (EV) rebate program, leaving industry leaders like Elon Musk and Donald Trump reeling. This dramatic decision follows a surge of fraudulent rebate claims that overwhelmed the system, leading to an urgent investigation and a nationwide backlash against the automaker.
Just last month, Tesla dealers in Canada submitted over 43 million CAD in rebate claims in a matter of days, with one dealership allegedly filing 4,000 claims in just three days. In response, Transport Minister Chrystia Freeland froze all pending payments to Tesla and launched a probe into potential fraud. Critics accuse Tesla of exploiting the system, a move that has sparked outrage among Canadian dealers and consumers alike.
This ban is not occurring in a vacuum. It coincides with rising political tensions, particularly with Trump back in office and imposing a sweeping 25% tariff on imported vehicles. Prime Minister Mark Carney has labeled this tariff a direct attack, and Tesla, often seen as an ally of Trump, has become a focal point of Canadian retaliation. Provinces and cities across Canada are now following suit, implementing their own restrictions against the automaker.
The fallout has been swift and severe. Tesla’s stock plummeted 5.6% after the ban, and sales figures reveal a staggering 70% drop in Canada alone. Across Europe, Tesla is facing similar declines, with sales down by as much as 64% in Sweden and 36% in France. As the company grapples with these challenges, protests against Tesla are erupting on the streets, with activists accusing Musk of betraying the climate mission.
Tesla now stands at a crossroads, facing an urgent need to recalibrate its strategy in North America and rebuild trust with regulators. The question looms large: can Tesla navigate this political minefield and emerge stronger, or will it be left in the dust as global competitors gain ground? The automotive world is watching closely as this high-stakes drama unfolds.