When it comes to Canada鈥檚 electric vehicle subsidy, Tesla is getting paid and the car dealerships are getting paid. But some folks who actually bought an EV are not getting any money.
鈥淭hey鈥檙e protecting the dealerships but not the people who were supposed to benefit from the EV program,鈥 said Sherine Young, a Mississauga mom who placed an order for her Kia EV9 in July 2024, but did not receive delivery until April this year聽鈥 after the federal government鈥檚 iZEV rebate program had been suspended.
Tesla has been the biggest recipient of Canadian EV rebates, claiming $713 million since 2019.
Young thought she was going to get $5,000 off her new EV and was disappointed to learn that because the car took so long to arrive, she would have to pay the full sticker price.
鈥淭hey should be honouring when you actually purchased the vehicle because that was within the program鈥檚 time frame,鈥 she said.
The Incentives for Zero Emissions Vehicle program (iZEV) provided $2,500-$5,000 rebates to the purchasers of zero emission vehicles, including electric vehicles and plug-in hybrids. Dealers fronted the cash to buyers and were later reimbursed by the government.
The iZEV program was wildly popular, handing out more than $2.6 billion in rebates to half a million people, before it ended abruptly in January because it ran out of money.
In March, the Star broke the story that Tesla filed more than 8,600 rebate claims, worth $43.1 million, in the program鈥檚 final 72 hours, which drained the remaining government funds and left hundreds of locally-owned car dealers on the hook for rebates they had paid out to customers.
Tesla鈥檚 surge in rebate claims raised suspicions because it would have required the company to sell two cars a minute, 24 hours a day for three days straight. It also came amid the opening shots in a trade war between Canada and the United States in which Tesla鈥檚 CEO, Elon Musk, led an effort to radically cut U.S. government subsidies.
After the Star鈥檚 revelations, Transport Minister Chrystia Freeland announced a freeze in payments to Tesla and launched a line-by-line audit of its claims.
Last week, Transport Canada began reimbursing dealerships for rebates paid out before the program was suspended on Jan. 12. The department then that it had determined Tesla鈥檚 rebate claims were legitimate.
Contacted by the Star, Freeland鈥檚 office would not confirm or deny that it had cleared Tesla of wrongdoing.
Meanwhile, people like Young, who purchased vehicles before the end of the rebate program, but didn鈥檛 receive their vehicle until after the program was cut-off, are left paying thousands of dollars more for their vehicle than they had counted on.
鈥淚t’s not fair that the consumers get left out,鈥 she said.
The rules of the iZEV program do not appear to have been enforced. They required dealerships to file paperwork before EVs were delivered to customers. Tesla鈥檚 surge was only possible because it involved backfiling claims for cars that had already been sold.
Now, in order to make hundreds of dealerships whole, Transport Canada is allowing them all to backfile for EVs sold more than a year ago.
Yet EV buyers, who often wait months for their cars to arrive, are being told they鈥檙e out of luck.
Records released by Transport Canada show a dramatic spike in sales in the 72 hours after the
鈥淪omebody who broke the rules is able to get away with it and somebody, like me, who followed the rules isn鈥檛,鈥 said Young.
When Young heard the rebate was being paused, she went to her dealership and doesn’t understand why they didn’t file for the rebate when they still had the chance.
Transport Canada did not respond to questions for this story. During the webinar explaining the reimbursement process for dealers last week, however, government officials confirmed that no rebates would be paid out for vehicles delivered after Jan. 12, even if they were purchased before that date.
Since Justin Trudeau stepped down as prime minister early this year, Canada鈥檚 EV policy framework has been in flux. In order to reduce carbon emissions, the government set up twin programs to hasten the adoption of EVs. The iZEV rebate was supposed to bring the purchase price down so it was on par with gas-powered vehicles (ownership costs like fuel and maintenance are far lower for EVs). The EV sales mandate was supposed to encourage carmakers to bring in more affordable EVs.
While the government has promised to bring in a new EV rebate program (that would exclude Tesla as long as the U.S. trade war continues), the program remains on pause.
At the same time, pressure from automakers has grown to get rid of the EV sales mandate, which they say is unachievable now that EV sales have slowed following the elimination of the rebate.
This kind of on-again, off-again policy is not providing the consistency people need when buying EVs or businesses need when investing in EV manufacturing and infrastructure, said Rachel Doran, executive director at Clean Energy Canada, a Vancouver-based think tank.
鈥淭hose kinds of signals are confusing to consumers,鈥 she said. “Starting and stopping or allowing this fund to have run dry is creating challenges, where a predictable system that’s capitalized for a reliable period of time helps ensure the people who are interested can get behind the wheel of a EV.”
Doran says rebates are still being used to spur adoption around the world, like in the U.K, where a new rebate of 拢3,750, or roughly $6,900, was just introduced.
The widely cited dip in EV sales is both short-term and localized to the U.S. and Canadian markets, said Kenneth Bokor, the creator and host of the on YouTube.
鈥淓V growth is still very substantial and doing well from a global perspective,鈥 he said.
EV sales remain on a tear, growing by thanks to the far more inexpensive Chinese EVs that have recently hit markets.
Those cheap EVs, typified by BYD鈥檚 Seagull and Dolphin cars that retail for about $20,000, are all-but-unavailable here due to 100 per cent tariffs declared last summer.
Bokor doubts North American carmakers, which have received tens of billions of dollars in subsidies to build out an EV supply and manufacturing chain, will ever be able to produce an EV that can compete on price with the Chinese. He advocates for letting Chinese carmakers into the market as long as they invest in factories and the supply chain here, providing both jobs and choice for Canadians.
But in the meantime, Bokor says fairness is paramount for government programs and folks like Young, who bought an EV in good faith, shouldn鈥檛 be punished for it.
鈥淚 think anybody that placed an order while the program was still valid 鈥 that rebate that was promised should continue to be offered, whether the delivery occurred after that date or not.鈥
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