Electric vehicle rebates in Canada differ from those in the U.S., but they serve the same purpose: bringing the upfront costs of EVs down. Dealerships provide rebates of up to $5,000 at the point of sale and then the government reimburses them. However, before the program ended in January, Tesla reportedly claimed over half of the remaining funds, leaving Canadian dealers in the red. Now, they’re pissed.

Welcome back to Critical Materials, your daily round-up of news and breakthroughs shaping up the world of electric cars and autonomous vehicles. Also on our radar today: A U.S. agency said California’s plans to ban gas car sales by 2035 are not subject to review or repeal by Congress. And Toyota has halted the production of the RAV4 in Japan after an explosion killed a worker at a parts factory.

30%: Canadian Car Dealers Cry Foul Over Rebates Claimed By Tesla  

Photo by: InsideEVs

Canada’s iZEV rebate was paused in January after the funds earmarked for the program were allocated earlier than expected. The weekend before the program ended, there was a massive increase in claims from Tesla, as it claimed over half of the remaining $71.8 million (Canadian dollars).

The Toronto Star reported that four Tesla outlets filed for 8,653 EV sales in just 72 hours, worth $43.1 million in rebates. This ultimately led to the portal’s shutdown, leaving hundreds of dealerships without a way to recoup the rebates they had offered to buyers at the point of sale.

Independent dealerships have reportedly spent $10 million out of pocket. Now a Canada Automobile Dealers Association spokesperson thinks Tesla may have done something unusual, possibly illegal.

Here’s more from the Star: 

“These dealers in good faith gave customers the money for a program that is always refunded,” said CADA spokesperson Huw Williams. “They shouldn’t be left making a payment on behalf of the Government of Canada.”

“Tesla had a run on the bank,” said Williams. “Somehow, Tesla gamed the system.”

As per Transport Canada rules, rebate applications “must” be filed before the car is delivered. But that rule was apparently not being enforced, so it’s possible that previous claims were filed right before the rebate program was ending. Some officials likened that to the “Black Friday” of EV sales.

One Tesla store in Quebec City alone filed for 4,000 rebates in a weekend, according to the report. Now dealerships that were unable to file for reimbursements are in the red for as much as half a million dollars.

The dealers are fighting back hard and have the attention of Canada’s Transport Minister Anita Anand, who said she was “disappointed” at what happened and has ordered a review. Regardless of what may have happened, Tesla CEO Elon Musk has been vocal about ending EV subsidies here in the U.S.

“Take away the subsidies. It will only help Tesla,” he said last year of the federal tax credit in a post on X. The future of those subsidies is uncertain, as President Trump has threatened to repeal them, but so far, dealers in the U.S. haven’t had any trouble redeeming the credits.

60%: California’s Gas Car Ban Cannot Be Repealed: U.S. Agency

Electrify America Flagship Indoor Charging Station In San Francisco, California

Last December, the Environmental Protection Agency approved California’s ban on sales of new gas cars from 2035. Eleven other states plan to adopt the state’s Advanced Clean Cars II program.

However, Trump has vowed to strip California of its ability to set stricter emissions standards and plans to revoke the gas car ban, too. The Government Accountability Office said on Thursday that California’s gas car ban is not subject to review of repeal, even by Congress, according to Reuters.

That’s because the ban is not a federal regulation; it’s a waiver granted under the 1970 Clean Air Act—so even a Congressional vote to repeal it is deemed illegal, according to some officials.

Nonetheless, Republicans are now reportedly planning the next steps and the Department of Transportation, under President Trump, is also planning to push the EPA to loosen its emissions rules.

California has spearheaded America’s clean energy transition and its Advanced Clean Cars II program aims to have 100% of light-duty vehicles either fully electric, plug-in hybrid, or hydrogen-powered by 2035.

90%: Toyota Suspends RAV4 Production In Japan

Toyota has suspended the production of the RAV4 in Japan, where the hybrid and plug-in hybrid versions are also made.

According to Automotive News, the halt is in response to the death of a worker at parts supplier Chuo Spring Co. Two others were also injured and now, operations on three lines at two plants will be suspended for the first shift on Monday, March 10.

Toyota makes the RAV4 in Japan, Canada, the U.S. and China. It has been America’s best-selling SUV for eight consecutive years. Toyota sold a whopping 475,193 units in the U.S. last year, of which a little over 100,000 were imported.

100%: Should California’s Gas Car Ban Be Revoked?

California has been the authority in setting emissions standards for years, pushing the U.S. and inspiring the rest of the world with its stricter tailpipe rules that encourage faster EV adoption. But demand for EVs has seen some roadblocks recently and automakers are scaling up cautiously instead of a full-blown commitment.

Do you think California—and the eleven U.S. states that have adopted its tailpipe emissions standards—should continue to enforce them? Or should they be stripped of their ability to do so?

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