These days when one hears “Tesla” and “lawsuit” in the same sentence, conventional wisdom is that yet another disgruntled investor is suing Elon Musk’s company and/or Musk himself, seeking recoveries from Musk’s “going private” tweet, either longs or shorts. In this case however, the tables are turned, because as Electrek reports, one month after the Ontario government shut down its “generous” EV rebate, Tesla is suing the Ontario government claiming it “deliberately and arbitrarily” targeted the company, discriminating against Tesla based on how it was treated differently from other automakers through the shutdown of the EV incentives.
This is what happened: after the election of the Conservative party in June, Doug Ford, the party’s leader, said that they were shutting down the cap-and-trade program, which was financing the EV rebate – which was worth up to $14,000 – to finance a 10-cent per litre tax reduction on gasoline.
While one can debate whether the decision was good or not, few can argue that the new government was within its rights to shut down the program.
What Tesla is contesting, however, is how Ontario handled the sudden phaseout of the EV rebate, which Tesla claims is disadvantaging Tesla buyers, and is discriminating the company because it doesn’t use third-party dealers.
The $14,000 EV rebate was killed – effective July 14 – after the Conservative party took over the government. And, at the time, it wasn’t exactly clear who would be affected: some, such as Electrek, had assumed that the many Model 3 buyers who had a car on order, which would be many as Tesla had just opened orders for the dual motor and performance versions in Canada, were safe because the government announced this:
Inventory that dealers have on lots or orders made by dealerships with manufacturers on or before July 11, will also be honoured for the incentive provided that the vehicle is delivered to consumers, registered, and plated by September 10.
One question emerged because while Tesla doesn’t have third-party dealers, it does have dealership licenses for its stores in Ontario. At the same time, buyers expressed concerns as the government announced they are treating orders for Tesla vehicles differently and if buyers don’t have their cars by July 11, they won’t have access to the $14,000 rebate. Meanwhile, with Tesla’s logistical issues, it was unlikely that most buyers would receive their cars on time.
Subsequently, the government changed its wording to explicitly mention “franchise dealerships.”
This means that many Model 3 buyers who budgeted their order while taking into account the $14,000 rebate for electric vehicles are now not going to be able to get the rebate. This is the case even if Tesla delivers the vehicles before September 10, while EVs sold by any other automakers through dealerships will be eligible for the rebate if delivered and plated by then.
As a result of the nuanced government wording, Electrek estimated that this situation could affect close to 1,000 buyers.
And, as a result, Tesla is now contesting the government’s decision with a lawsuit against the government claiming the Ministry of Transport had “discriminatory intentions”, and as evidence, Musk brought forward a comment that Minister of Transportation John Yakabuski said in the Legislative Assembly:
“But we also were extremely fair in the way that we ended it. On July 11, we announced that until September 10, all dealers and anyone who had purchased a vehicle or had a vehicle on order, as long it was plated and delivered by September 10, other than Tesla—they would receive their rebate. [Emphasis added]”
In the suit, Tesla also claimed that it had tried to work with the ministry to try understand the exclusion from the phase-out period, but it wasn’t able to, which resulted in the lawsuit. The company is also asking for the case to be heard urgently as there is less than a month left until September 10, he deadline that has been set for all other automakers except Tesla.
The full lawsuit is below, courtesy of Electrek