More than 200 auto dealers across the country were “stiffed†when Tesla “had a run on the bank,†claiming tens of millions of dollars in EV rebates on the last weekend before the government abruptly shut down the public subsidy program in January.
Now these independently owned dealerships are out of pocket an estimated $10 million, having provided 2,295 rebates to customers and expecting to get reimbursed, according to the Canadian Automobile Dealers Association (CADA).
“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.â€
The iZEV EV rebate program offered from $2,500 to $5,000 toward the purchase of electric vehicles and plug-in hybrids. Dealerships provided the rebate to buyers upfront and expected to be reimbursed by the government.
On Jan. 10, as political turmoil embroiled the federal government, Transport Canada informed dealerships that the EV rebate program would run out of money before its scheduled end in March.
“Due to the high uptake, the iZEV Program will be paused in a few weeks,†stated the email sent to dealerships just before noon on the Friday, obtained by the Star.
Records released by Transport Canada show a dramatic spike in sales in the 72 hours after the
But that weekend there was an unprecedented surge in claims from four Tesla outlets, the Star revealed this week. The four Tesla showrooms claimed 8,653 EV sales in 72 hours and filed for $43.1 million in rebates — more than half of the $71.8 million in remaining funds.
By Monday, all the money was gone and Transport Canada announced the EV rebate program was “paused.†It shut down the online claims portal for dealers, leaving hundreds without recourse to recoup their money.
“Tesla had a run on the bank,†said Williams. “Somehow, Tesla gamed the system.â€
“What we can’t figure out is how this could have happened without setting off alarm bells.â€
Williams said Tesla’s showrooms are owned and operated by the multinational company headed by Elon Musk, the world’s richest person, unlike most dealerships in Canada, which are independent, locally owned family businesses.
Tesla did not respond to a request for comment.
CADA has been pleading their case in Ottawa for the past several weeks, and Williams says the Star’s reporting on the Tesla rebates hit a nerve. After he sent the Star’s story to Transport Minister Anita Anand, she texted back: “I am disappointed.â€
“This report is unacceptable and I am asking the department that is responsible for administering this program to provide me with detailed and complete information,†she wrote, according to a copy of the text seen by the Star.
Transport Canada, which administers the iZEV rebate program, has been unclear on whether anything improper occurred.
The crux of the matter is when paperwork called an “eligibility assessment†needs to be filed by the dealership.Â
On the one hand, Transport Canada says dealers “must always submit an eligibility assessment prior to an incentive being paid.â€
On the other, it says, “there is no rule†to prevent them from submitting the paperwork in bulk, after the cars have already been delivered.
One of the four Tesla dealerships — on Dundas Avenue West in Etobicoke — reported selling more than 1,700 vehicles in a single day. Although the dealership is surrounded by a large parking lot, it can accommodate fewer than 200 vehicles, according to a count of parking spaces on Google Maps.Â
“Tesla didn’t sell those cars that weekend,†a Transport Canada official said.
CADA surveyed its 3,500 dealer members to determine how many rebated EVs were sold that didn’t get inputted into the system before the federal government shut it down. Their numbers, which have not been made public, show 226 dealerships provided rebates on 2,295 electric vehicles and have not been reimbursed. This would total more than $10 million, if the breakdown of battery electric and plug-in hybrid vehicles mirrored all the rebates given out since 2019.Â
Williams said one dealership is out of pocket $690,000. The Star spoke with two dealers in Quebec; both pointed out that most Quebec auto dealers are closed on the weekend and therefore were not only unable to sell EVs during the last weekend the rebate program was open, but also weren’t able to file paperwork when they returned to work on the Monday. One of the dealers said he was out $300,000. The other said he had fronted $410,000, and is considering layoffs because of the financial squeeze.Â
Terry Budd, who owns eight car dealerships in the Oakville and Hamilton areas, said there was no notice from the government that the iZEV program was coming to an end. Instead, he received an email from CADA informing him the program was running short on funds and advising him to tell his salespeople and customers.
While they hurried to get as many rebates submitted as possible over the weekend, more than a month later, they still haven’t been paid for the 35 EVs and hybrids they sold that weekend. Budd estimates he’s out $150,000 for the rebates he submitted and another $25,000 for the ones that weren’t.Â
“The deal’s done and we’re shy that money,†he said. “Nobody can tell us whether we’re going to be paid or not.â€
When he learned that a single Tesla outlet in Quebec City filed more than 2,500 rebates in a single day and 4,000 over the weekend, he was incredulous.
“There’s no way they delivered or sold that many cars in a weekend,†he said. “They cleared everyone else out.â€
With data analysis from Nathan Pilla.
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