Tesla wins against Ontario gov as judge rules that phase-out of EV incentives is discriminatory

In Ontario, a judge has sided with Tesla and agreed that the government was discriminating against the company when it excluded Tesla from the phase-out period of the removal of the province’s EV incentives.

Now it is up to the Ministry of Transport’s to make things right for the Tesla buyers.

If you are not aware of the situation, the new Ontario government shut down its generous EV rebate just as Tesla Model 3 deliveries were blowing it up.

The shutdown of the rebate, which was worth up to $14,000, is a done deal and it is not what is being contested by Tesla – something that has been grossly misrepresented in the media.

Tesla is actually contesting that it was the only automaker excluded from a phase-out period.

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, in order to finance a 10-cent per litre tax reduction on gasoline.

It can be argued whether or not that’s a good decision, but there’s no doubt that the new government is within its rights to shut down the program even though it will undoubtedly lead to more pollution from the province’s transport sector.

What is being contested is how they handled the aggressive phaseout of the EV rebate, which is disadvantaging Tesla buyers.

After the Conservative party took over the government, they killed the $14,000 EV rebate effective July 11.

At the time, we thought that the many Model 3 buyers who had a car on order, which would be a lot since Tesla 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.

While Tesla doesn’t have third-party dealers, they do have dealership licenses for their stores in Ontario.

Some buyers expressed concerns, which are warranted because 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.

The government later 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.

Earlier this month, Tesla filed a lawsuit against the government claiming the Ministry of Transport had “discriminatory intentions.”

The Ministry of Transport later tried to have the lawsuit dismissed, but Tesla has now told Electrek that the judge sided with them and made the phase-out plan illegal due to its discriminatory nature against Tesla.

It’s now up to the government to come up with a different plan that would be fair to Tesla buyers.

We contacted the Ministry of Transport about the ruling, but they weren’t available for an immediate response.

We will update when we get more information.

Update: the Ministry of Transport has yet to answer our inquiry, but Tesla sent us the following comment:

“We’re pleased with the Court’s decision to strike down the Ministry’s transition plan as unfair and unlawful. Tesla only sought fair treatment for our customers and we hope the Ministry now does the right thing by delivering on its promise to ensure all EV-owners receive their incentives during the wind-down period.”

Electrek’s Take

The Ontario government looks very bad here because not only it was clear that it was discriminatory against Tesla, they decided to double down on it when it was pointed out to them and tried to have the suit dismissed.

Also, Doug Ford apparently made some incorrect comments about the program when asked about the lawsuit – indicating that he probably didn’t understand the EV incentive program at all, which might actually be the reason why they targeted Tesla.

But it doesn’t mean that the situation is fixed.

My understanding is that the ruling basically invalidated the phase-out announced by the government and now they have to come up with a new one.

The most simple decision would be to enable every Tesla buyer who ordered before July 11 and take delivery before September 10 to get the rebate, but that would be the intelligent thing to do and that hasn’t been their preferred method so far.

For now, buyers are in a sort of limbo.