Elon Musk’s Tesla Faces Major Setback in Canada: What’s Really Going On?

Tesla’s relationship with Canada has taken a hit after British Columbia (BC) decided to pull the company from its electric vehicle (EV) rebate program. This change, which was announced on March 25, 2025, has caught the attention of the tech and automotive world, especially as it comes amidst rising trade tensions between Canada and the United States.

The BC government has suspended all rebate payments for Tesla vehicles, effectively removing the company from future participation in the program. Many experts believe this action is a direct response to the recent tariffs imposed by the U.S. administration on automotive imports, which have impacted the automotive industry as a whole. Tesla, which has a strong presence in North America, has voiced concerns over how these growing international trade disputes could push up manufacturing costs and affect the price competitiveness of their vehicles globally.

Elon Musk, the CEO of Tesla, has been open about the significant challenges his company faces due to these tariffs. Speaking on the matter, Musk acknowledged that Tesla is not immune to the impact of the trade conflict. While the company assembles its cars in the U.S., many of its vehicle parts come from countries like Canada and Mexico, both of which are now subject to higher import duties. These added costs could put further strain on Tesla’s ability to keep prices down.

This situation in BC is not the first instance of Tesla facing opposition in Canada. Earlier in 2025, the city of Toronto withdrew public funding for Tesla vehicles used in taxis, rentals, and ride-sharing services. This decision was partly due to concerns surrounding Musk’s political statements and affiliations. Additionally, Tesla’s invitation to the Vancouver International Auto Show was revoked, citing safety concerns tied to protests against Musk’s political activities.

As tensions continue to rise, the future of Tesla’s operations in Canada remains uncertain. While the company has not issued an official response regarding BC’s recent move, it is clear that the ongoing trade disputes and political factors are influencing the company’s position in the country. Tesla, for its part, is closely monitoring these developments to understand the long-term impact they could have on its operations in North America.