Judge rules in favour of Tesla in Ontario rebate

Judge rules in favour of Tesla in Ontario rebate dispute
Canadian Press
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Published:
August 28, 2018

Updated:
August 28, 2018 2:20 PM EDT

Filed Under:
Toronto SUN News Ontario
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A Tesla emblem is seen on the back end of a Model S in the Tesla showroom in Santa Monica, Calif., on Wednesday, Aug. 8, 2018. THE CANADIAN PRESS/AP-Richard Vogel
Tesla has secured a minor legal victory in Ontario in its push for equal treatment as the company looks to defend its direct-to-consumer business model in numerous markets.

The Ontario case comes as Tesla struggles to move ahead with its retail model in the U.S. where it has not used franchised dealerships.

Numerous U.S. states including Michigan, New Jersey and Missouri have passed laws in recent years to prevent Tesla from selling vehicles directly to consumers following pressure from automobile dealership associations.

Ontario Superior Court judge Frederick Myers ruled Monday that the provincial government’s decision to exclude Tesla from a grace period for an electric vehicle rebate program was arbitrary and had singled out Tesla for harm. The ruling requires the government to review the program so that it includes Tesla or provides adequate justification for the company’s exclusion.

Tesla launched the case after the government ended the rebate program worth up to $14,000 per vehicle on July 11, but said it would extend the rebates to vehicles already sold through dealerships if they were delivered and registered within 60 days.



Myers found the government had originally tried to exclude Tesla from the extension by specifying only vehicles ordered through a dealership would be eligible for the extension. When it learned Tesla did indeed sell through its own dealership network, the government further specified to the company that only franchised dealerships would be eligible.

Tesla CEO Elon Musk has staunchly defended the direct retail model.

Musk said in a blog post that franchised dealerships don’t have enough incentives to sell electric cars and that the company needs to place its sales venues in areas where it can attract foot traffic and educate potential customers.

The Ontario Progressive Conservatives said they had specified only franchised dealerships were eligible for the rebate extension to help protect small- and medium-sized businesses that may have been hit by the program.

Tesla responded that many franchised car dealerships in Ontario are owned by large businesses that own numerous franchises.

The electric carmaker said it was pleased with the court’s decision to strike down the “unfair and unlawful” transition plan.

“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.”

A spokesman for Attorney General Caroline Mulroney said the government is “reviewing the ruling and will make a decision on how to proceed in the coming days.”