Canada freezes Tesla’s $43M in EV rebate payments following flood of last-minute claims #CanadaFinance

All federal zero-emission vehicle incentive payouts to Tesla have been put on hold, pending an investigation to determine the validity of “each claim,” according to Canada’s Transport Minister Chrystia Freeland.

The U.S. EV maker filed 8,669 rebate claims worth $43.2 million during the final three days of Ottawa’s Incentives for Zero-Emission Vehicles (iZEV) program in January. The rush of claims helped empty government coffers of funding and left more than 200 franchised dealers — and automakers that stepped in in support — on the hook for more than $10 million in unpaid government rebates.

Tesla’s $43M in Canadian EV rebate claims raise alarm as competitors demand answers

In a statement March 25, Freeland said she ordered department staff to stop all outflows to Tesla when she took over as transport minister March 23.

“No payments will be made until we are confident that the claims are valid.”

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In a letter sent from Tesla to Transport Canada on March 28 and obtained by Drive Tesla, the company said the $43 million in rebate claims were lawful, properly submitted and fully compliant with the long-standing design of the program.

Signed by Fereshteh Zeineddin, director of sales and service in Canada, the letter denied claims that Tesla “gamed the system” by filing thousands of rebate claims in the final days of the program. The filings were for vehicles legally sold to eligible customers, priced according to the program’s eligibility guidelines, and delivered in accordance with long-standing procedures, the letter said.

The surge in rebates was for deliveries made prior to the program’s announced funding pause — not any attempt to manipulate the system, the letter said.

Claims submitted by Tesla and other dealerships in the program’s final days do not necessarily reflect sales or deliveries in that timeframe. The claims captured by Transport Canada’s data, reported monthly, reflect the date the claim enters the government’s system. They could be paid or be in processing.

Transport Canada did not say whether any of Tesla’s claims were cause for concern, and it is not clear how many of the thousands of claims made between Jan. 10 and 12 had already been paid by Ottawa. Once filed with Transport Canada, iZEV claims worth up to $5,000 per vehicle were typically paid within 20 business days of the purchases being validated.

The flood of claims that put the iZEV program underwater began Jan. 10, instigated by a warning from Transport Canada that the program would run out of funding the expected end on March 31.