Elon Musk's Tesla threatens to sue Canada

In a twist of events, Tesla has turned the tables and threatened to sue Transport Canada after it froze $43 million in federal EV incentive credits after Tesla drained the majority of the fund over a single weekend.

A letter was sent to the government agency on March 28 expressing surprise over the government's choice to freeze the funds, and stating that Tesla was complying with the government's regulations and it expected funding to resume. This letter was first reported on by the Toronto Star. 

In previous reporting, Tesla claimed that it was backfilling orders from cars that were previously sold and that it was allowed to do this even though the wording on the government's website claimed otherwise.

Tesla's letter noted that in a 2023 webinar, Transport Canada allowed the practice. It was sent to all participating automakers across Canada.

This could be true because shortly after the Toronto Star reported on the fact that Tesla took up most of the federal funding, the wording was changed on the government's website to allow for backdating.

The Star called out this change, and it was reverted back to its original state, which doesn't allow backdating.

Tesla also claims that the freeze was put on the funds during "caretaker" rules, which state that since Prime Minister Carney was in an election period, the government is supposed to act with restraint until the House of Commons is reassembled again, and thus the rebates can't be frozen during that time.