Dealers to Be Paid Out for EV Rebates Made After Tesla Drained Government Coffers in January

The Canadian government will reimburse auto dealers that paid for their customers' federal electric vehicle (EV) incentives but were unable to get reimbursed before the program shut down.

“All eligible claims will be paid out,” a Transport Canada spokesperson told the Toronto Star.

Under the Incentives for Zero-Emission Vehicles (iZEV) program, the federal government agreed to give consumers a tax rebate of up to $5,000 on eligible EVs, plug-in hybrids (PHEVs), and hydrogen vehicles. In order to make the process more streamlined for buyers, dealers were allowed to effectively discount vehicles by the equivalent of the amount due to be repaid by the government and collect that money themselves.

However, the success of the iZEV program meant that the pot of money set aside for it was depleting faster than expected. To prepare consumers and dealers, the government sent out a letter warning of the dwindling sum.

In the days following the announcement, four Tesla dealerships claimed rebates for more than 8,600 vehicles, claiming a total of $43 million in just 72 hours, and causing the iZEV program to run completely out of money much faster than most independent dealerships expected (Tesla runs all of its own stores, meaning that they are not traditional dealerships, which are owned independently). As a result, many dealers who were expecting refunds from the government were left in the lurch to the tune of an estimated $11 million nationwide.

The volume and speed of claims coming from Tesla led to questions about whether or not the sales were legitimate. Many were also frustrated that Canadian-owned dealers were missing out on the rebate while the American company whose CEO was intimately linked to an administration in the midst of launching a trade war against us was raking in the rebates.

As a result, Transport Minister Chrystia Freeland announced a freeze on payouts to Tesla while an audit of its claims was undertaken. She also promised that dealers would be made whole.

Soon they will learn exactly how much they will recoup, as the government has planned two webinars for dealers in the coming days. The government is expected to reopen the online portal for iZEV rebates and any dealer who fronted the incentive to a customer before the program’s suspension will be able to submit a claim for reimbursement.