Tesla Canada takes province to court over EV rebates Musk-owned automaker argues exclusion from program has ‘deprived’ Manitobans of $560K By: Chris Kitching Posted: 5:05 PM CDT Monday, Jun. 1, 2026

Tesla’s Canadian subsidiary is asking a judge to overturn the Manitoba government’s decision to exclude the automaker from a taxpayer-funded rebate for electric vehicle purchases and leases.

The NDP announced Tesla’s exclusion from the program in March 2025 under the government’s “commitment to be elbows up” in retaliation to tariffs imposed by U.S. President Donald Trump, who at the time gave Elon Musk, the CEO of Texas-based Tesla Inc., a job in his administration.

“In this case, the Manitoba government targeted a Canadian corporation with well-established economic roots in Manitoba, and acted without procedural fairness or justification of any kind, and in a manner manifestly disconnected from, and inconsistent with, the program objectives, to the detriment of Tesla Canada and Manitobans,” the company’s lawyers said in an 18-page application for judicial review filed in the Court of King’s Bench Friday.

Tesla is seeking an expedited court hearing this month to challenge the exclusion, which it argued is “arbitrary, unfounded and rationally disconnected” from an “elbows up” approach, given the company employs about 11 people in Manitoba, operates 44 EV charging stations using electricity purchased from Manitoba Hydro, and contributes to Canada’s economy and environmental sustainability aims.

Tesla Canada said it does not operate in the U.S., nor does it have a role or involvement with the U.S. administration. The application said no other EV manufacturer with a U.S. parent company or U.S. operations was excluded from the program.

Tesla claims the rule of law and its procedural and legal rights were breached, and the decision lacked transparency.

“As a result of the Tesla exclusion, Tesla Canada has suffered, and will continue to suffer, substantial and unjustified harm, including lost market share, reputational harm and lost opportunity to build customer loyalty.”

“As a result of the Tesla exclusion, Tesla Canada has suffered, and will continue to suffer, substantial and unjustified harm, including lost market share, reputational harm and lost opportunity to build customer loyalty,” the application said.

The document said Manitobans who purchased qualifying Tesla vehicles since the exclusion were “unfairly and unreasonably deprived” of at least $560,000 in rebates. Tesla wants a judge to declare that those owners are eligible for a rebate.

The application names the government, the ministers responsible for justice, Manitoba Public Insurance, finance and environment and climate change, and MPI itself as respondents.

Tesla is asking the court to order the respondents to hand over materials that explain or support the decision to exclude the automaker. Tesla wants all mentions of the exclusion to be removed from government and MPI websites.

First-come, first-served rebates of up to $4,000 were first offered in 2024. MPI administers the program. In March 2025, Finance Minister Adrien Sala said Teslas were no longer eligible as part of the “elbows up” commitment.

Tesla decided to launch a challenge when the exclusion was extended in March for the 2026-27 fiscal year.

The province has said more than 5,000 Manitobans have received a rebate, with $25 million in funding allocated, since the program started.

The province declined to comment Monday on Tesla’s application. A spokesperson pointed to comments by Premier Wab Kinew last week. MPI deferred comment to the province.

Kinew raised Tesla’s impending legal challenge in question period Thursday.

“When it comes to Elon Musk and his affinity for supporting Donald Trump’s attacks on Canada, we cut him off — we ended the subsidies for Tesla vehicles,” Kinew said.

“We have a simple message for (Tesla): Elon, get Donald Trump to stop the tariffs, and then we can talk about the EV rebates.”

Tesla’s application said the company wasn’t advised, consulted or permitted to make any submissions before the exclusion was announced.

The company claims the province hasn’t provided a formal statement explaining the basis or rationale for the decision. The application said it hasn’t been able to determine what authority the exclusion was made under.

The application said Tesla EVs accounted for more than 20 per cent of all approved rebates under the program between August 2024 and February 2025.

“We have a simple message for (Tesla): Elon, get Donald Trump to stop the tariffs, and then we can talk about the EV rebates.”

The application included a 31-page affidavit from Tesla Canada corporate director Dustin Leitch. He wrote that the exclusion puts Tesla at a competitive disadvantage in Manitoba, where it sells about 10 vehicles per month that would otherwise be eligible for a rebate.

Customers cancelled five orders after the exclusion was announced last year, the affidavit said.

The total provincial sales tax paid on Tesla vehicles is more than seven figures per year, Leitch wrote.

He estimated that Manitobans who buy Teslas between now and the end of the 2026-27 fiscal year will miss out on $400,000 in rebates if the exclusion continues.

Tesla’s lone Manitoba store is in the Waverley Auto Mall in south Winnipeg. Sales are also conducted via the company’s website.

— with files from Erik Pindera

chris.kitching@freepress.mb.ca

Chris Kitching
Reporter

Chris Kitching is a general assignment reporter at the Free Press. He began his newspaper career in 2001, with stops in Winnipeg, Toronto and London, England, along the way. After returning to Winnipeg, he joined the Free Press in 2021, and now covers a little bit of everything for the newspaper. Read more about Chris.

Every piece of reporting Chris produces is reviewed by an editing team before it is posted online or published in print — part of the Free Press‘s tradition, since 1872, of producing reliable independent journalism. Read more about Free Press’s history and mandate, and learn how our newsroom operates.