Tesla threatens legal action over Manitoba's end to EV rebate for company vehicles

The Manitoba government says Tesla is threatening legal action over the province's decision to stop its rebate for Tesla vehicles.

WINNIPEG — The Manitoba government said Thursday it is facing potential legal action over its decision to remove auto manufacturer Tesla from its rebate program for electric vehicles.

Premier Wab Kinew’s office released a letter the government received last week from lawyers for Tesla Motors Canada. The two-page document says the company intends to ask a judge to set aside Tesla’s exclusion from the rebate program as “procedurally unfair and undertaken for an improper purpose.”

“While the government has never formally identified any reason for Tesla Canada’s exclusion, the exclusion appears to be unrelated to, and inconsistent with, the stated objectives of the EV rebate program,” the letter states.

Company officials were not immediately available for comment.

Kinew said the government will only consider reversing its decision if the United States drops its tariffs on Canadian goods. Elon Musk, Tesla’s chief executive officer, served as a senior adviser to U.S. President Donald Trump.

“We have a simple message to them -- Elon, get Donald Trump to stop the tariffs, and then we can talk about the EV rebates,” Kinew said in question period.

The NDP government launched the rebates in 2024 of up to $4,000 for people who buy electric vehicles worth up to $70,000. Last year, the government stopped the rebates for Tesla vehicles and vehicles made in China in retaliation for tariffs.

The letter from Tesla’s lawyers points to a 2018 court ruling on a similar rebate program in Ontario.

An Ontario Superior Court justice ruled the province’s decision to exclude Tesla from an electric vehicle rebate program was arbitrary and singled out Tesla for harm. The Ontario government moved to include Tesla buyers before winding down the program.

Before Manitoba excluded Tesla vehicles, the company had been very popular with shoppers seeking rebates.

Between August 2024 and February 2025, Tesla vehicles accounted for more than 20 per cent of all approved Manitoba rebates -- or 337 vehicles -- for a total of just under $1.3 million, according to a spreadsheet obtained by The Canadian Press under the freedom of information law.

Ford was in a distant second place with 226 vehicles and $864,500, followed by Hyundai, Chevrolet and more than a dozen other manufacturers.

Opposition Progressive Conservative Leader Obby Khan said he would support any move to bolster Canadian businesses. The Tories produced government documents that show the province has continued to contract with Musk’s SpaceX firm for telecommunications services.

“Those contracts ... can be fulfilled by companies in Manitoba or in Canada,” Khan said.

This report by The Canadian Press was first published May 28, 2026.

Steve Lambert, The Canadian Press