As we reported last month, the new Ontario government shut down its generous EV rebate just as Tesla Model 3 deliveries were blowing it up.

Tesla is now suing the Ontario government claiming they deliberately and arbitrarily targeted them by how they treated the electric automaker differently from other automakers through the shutdown of the EV incentives.

The shutdown of the rebate, which was worth up to $14,000, is a done deal.

After the election of the Conservative party in June, Doug Ford, the party’s leader, said that they were shutting down the cap-and-trade program, which was financing the EV rebate, in order to finance a 10-cent per litre tax reduction on gasoline.

It can be argued whether or not that’s a good decision, but there’s no doubt that the new government is within its rights to shut down the program even though it will undoubtedly lead to more pollution from the province’s transport sector.

What is being contested is how they handled the aggressive phaseout of the EV rebate, which is disadvantaging Tesla buyers.

After the Conservative party took over the government, they killed the $14,000 EV rebate effective July 11.

At the time, we thought that the many Model 3 buyers who had a car on order, which would be a lot since Tesla just opened orders for the dual motor and performance versions in Canada, were safe because the government announced this:

Inventory that dealers have on lots or orders made by dealerships with manufacturers on or before July 11, will also be honoured for the incentive provided that the vehicle is delivered to consumers, registered, and plated by September 10.

While Tesla doesn’t have third-party dealers, they do have dealership licenses for their stores in Ontario.

Some buyers expressed concerns, which are warranted because the government announced they are treating orders for Tesla vehicles differently and if buyers don’t have their cars by July 11, they won’t have access to the $14,000 rebate.

The government later changed its wording to explicitly mention “franchise dealerships.”

This means that many Model 3 buyers who budgeted their order while taking into account the $14,000 rebate for electric vehicles are now not going to be able to get the rebate. This is the case even if Tesla delivers the vehicles before September 10, while EVs sold by any other automakers through dealerships will be eligible for the rebate if delivered and plated by then.

Last month, Electrek estimated that this situation could be affecting close to 1,000 buyers.

Tesla is now contesting with a lawsuit against the government claiming the Ministry of Transport had “discriminatory intentions.”

They brought forward pieces evidence like a comment that Minister of Transportation John Yakabuski said in the Legislative Assembly:

“But we also were extremely fair in the way that we ended it. On July 11, we announced that until September 10, all dealers and anyone who had purchased a vehicle or had a vehicle on order, as long it was plated and delivered by September 10, other than Tesla—they would receive their rebate. [Emphasis added]”

In the suit, Tesla claimed that it tried to work with the ministry to try to understand the exclusion from the phase-out period, but it wasn’t able to – hence the lawsuit.

They are asking for the case to be heard “urgently” since there’s less than a month left until September 10, which is the deadline that all other automakers are benefiting from except Tesla.

Here’s the full lawsuit filed today:

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