Tesla Wins Case Against Ontario Government, Court Ruling Proves Carmaker was Treated Unjustly

Business February 15, 2019

Tesla filed a lawsuit against the Ontario government for unjustly canceling its vehicle rebate program last month, and a few days ago, the Ontario Superior Court ruled in the favor of the carmaker, ordering the government to reverse its decision and give rebates to eligible Tesla customers.

Last month Tories announced its decision to cancel subsidiaries on all electric vehicles, excluding over 600 Tesla buyers from rebate programs

Tesla Wins Lawsuit

In the lawsuit, Tesla argued that the government’s ‘unjustified targeting’ had left hundreds of customers without rebates after they ordered a Tesla vehicle. Now Premier Doug Ford has taken a U-turn from his previous stance on the automaker after his progressive conservative government lost the case against the California-based electric car giant, and is offering $14,000 rebates to hundreds of eligible Tesla customers.

Last month Tories announced its decision to cancel subsidiaries on all electric vehicles, excluding over 600 Tesla buyers from rebate programs. Now the court has ordered the government to change its ‘unlawful’ decision and offer incentives to customers who have bought vehicles from Tesla costing $75,000 or less. According to the eligibility criteria, only Tesla owners whose vehicles are received and registered by September 10, qualify for rebates.

The court said in its ruling that the ministry will have to renew its Electric and Hydrogen Vehicle Incentive Program, introduced by the previous government, which offers up to $14,000 in rebates on select vehicles.

Government to Pay Tesla $125,000 in Legal Fees

Kurtis Evans, a teacher at an elementary school in Toronto, who receives his Tesla vehicle in less than a week, is ecstatic to hear the court’s decision. He told a local news agency that the government’s decision to phase out incentive programs for electric car owners made him very nervous, since it could have cost him and hundreds of other Tesla buyers thousands of dollars.

Evans, who bought the new car for $74,000 to replace his old Honda Civic, said that the $14,000 subsidy was the biggest reason why he chose to make the big purchase. The court case, in a sense, was a ‘make-or-break’ for him.

Justice Frederick Myers released a 17-page ruling on Monday, saying that the government had been very unfair in its treatment towards Tesla after it announced that the rebate programs would be phased out after September 10. Myers said that the decision singled out Tesla which is the number one electric car seller in Canada.

The judge wrote in the ruling that the government’s decision to limit the incentive program is ‘egregious’. The government was also ordered to pay $125,000 to the carmaker to cover its legal costs.

The rebate program was only offered on Tesla’s less expensive Model 3 cars and not on the luxurious Model S and Model X

Tories’ Stance

Tories said in its defense that the subsidies on luxury electric cars come out of the pockets of common folks of Hamilton. The government says that it is unfair that lower income families have to contribute to $100,000 purchases of millionaires.

The Premier said that the motivation behind the decision to phase out the subsidies was to protect the little person. He added that maybe Tesla should consider opening up a factory in Canada if it really cares about reducing the price burden on its customers.

Myers fired back at Ford by saying that the rebate program was only offered on Tesla’s less expensive Model 3 cars and not on the luxurious Model S and Model X. So it doesn’t make sense to phase them out if they are only benefiting customers from a lower income bracket. Moreover, BMW, which is far more expensive than Tesla is also eligible for a subsidy on its X5 model, and the government is yet to take action against it.

A Tesla spokesperson said that the company is happy with the court’s decision and hopes that the ministry keeps its promise of giving rebates to all eligible electric car owners. A number of customers who had cancelled their vehicle orders after hearing about the government’s decision last month are welcome to renew their orders, the spokesperson added.