Tesla has become caught in the tariff cross-fire between the Donald Trump administration and erstwhile US allies, with Canadian provinces and the federal government extending the company’s exclusion from its EV rebate programs, and the UK considering a similar ban.
As we reported earlier this month, the province of British Columbia and the City of Toronto excluded Tesla from their EV rebate and incentive programs, although the focus at that time appeared to be on Elon Musk. “It’s just for Tesla, and it’s because of Elon Musk,” BC premier David Elby told journalists.
That ban has now extended to other provinces. In Nova Scotia, multiple parties joined together for a near unanimous vote to exclude Tesla from its EV rebate program, citing both Musk’s association with Trump, and the tariffs. Manitoba has also excluded Tesla.
The Canadian federal government is also looking to exclude Tesla from all programs. The newly appointed transport minister Chrystia Freeland, who had proposed 100 per cent tariffs on Tesla during the recent campaign to replace Justin Trudeau as head of the Liberal Party, said Tesla will not be eligible for any incentives.
She also announced an investigation into revelations that Tesla at claimed $C43 million in government rebates just before the program was paused earlier this month. Those rebates have now been frozen.
“No payments will be made until we are confident that the claims are valid,” Freeland told the Toronto Star. “I also directed my department to change the eligibility criteria for future iZEV programs to ensure that Tesla vehicles will not be eligible for incentives so long as the illegitimate and illegal U.S. tariffs are imposed against Canada.”
The firestorm also risks extending to the UK, which has been Tesla’s one bright market spot in Europe over the last two months, showing an increase in sales as opposed to the sharp falls recorded on the continent, where Tesla sales have slumped by more than 70 per cent in some countries despite an overall surge in the uptake of EVs.
“We are looking at the zero emission vehicle mandate … (and) the money goes to Tesla, and looking at how we can better support the car manufacturing industry in the UK,” UK finance minister Rachel Reeves said in response to the Trump tariff moves.
Tesla has warned that it could be badly impacted by the tariff war, although Musk himself has not made it a centrepiece of his regular public statements, which instead have focused on support for far-right causes, and attacks on the judiciary and media who criticise his work with DOGE.
Giles Parkinson is founder and editor of The Driven, and also edits and founded the Renew Economy and One Step Off The Grid web sites. He has been a journalist for nearly 40 years, is a former business and deputy editor of the Australian Financial Review, and owns a Tesla Model 3.