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Tesla is threatening to take legal action against Manitoba after it removed the company from its electric vehicle rebate program last year, the province says.
Lawyers with the company owned by Elon Musk notified government in a letter last week that it intends to ask a Manitoba Court of King’s Bench judge to set aside Manitoba’s decision to exclude the U.S. carmaker from the EV rebate.
“It is Tesla Canada’s position that the the government’s exclusion of Tesla Canada from the EV rebate program has and will continue to cause harm to Tesla Canada and its Manitoba customers,” reads the two-page letter shared with media by the NDP on Thursday.
The document, dated May 22, warns the company planned to file an application for a judicial review over the province’s “unfair” and “improper” decision to exclude the U.S. carmaker from the Manitoba EV rebate program for 2025 and 2026, according to the notice addressed to the ministers of justice, environment, finance and Manitoba Public Insurance.
“While the government has never formally identified any reason for Tesla Canada’s exclusion, the exclusion appears to be unrelated to, and inconsistent with, the stated objectives of the EV rebate program,” reads the letter.
The document points out that Tesla won its 2018 legal case against the Ontario government for similarly excluding the company from its provincial EV rebate program.
Ontario also axed a $100-million Starlink contract with Musk’s SpaceX company after he began echoing U.S. President Donald Trump’s attacks on Canada.
Manitoba’s EV rebate rolled out in 2024 but was retroactive to 2023.
It entitled Manitobans buying a new electric vehicle or plug-in hybrid priced below $70,000 to a $4,000 rebate. Used and leased EVs qualified for a $2,500 or $1,000 rebate, respectively.
In 2025, Finance Minister Adrien Sala said removing Tesla from the EV rebate was about “Trump-proofing our economy” and a “commitment to be elbows-up.”
The head of the Manitoba Electric Vehicle Association stood by the Kinew government’s decision amid escalating trade tensions with the U.S. Manitoba did so after B.C. made a similar move.
Premier Wab Kinew revealed the legal threat levied at Manitoba on Thursday during question period.
Premier Wab Kinew, during question period at the Legislature on Thursday, revealed Tesla is threatening legal action against Manitoba. (Bryce Hoye/CBC)
“When it comes to Elon Musk and his affinity for supporting Donald Trump’s attacks on Canada, we cut him off, we ended the subsidies for Tesla vehicles,” he said.
“Tesla Canada intends to file legal action against us for cutting off Elon and we have a simple message to them: Elon, get Donald Trump to stop the tariffs and then we can talk about the EV rebate.”
The premier’s remarks came as Opposition Leader Obby Khan was criticizing the NDP for signing procurement deals for various services with U.S. companies. That includes contracts with SpaceX for Starlink products that grew by more than 400 per cent between last year and the year before.
“He is celebrating getting sued,” Khan told reporters after question period. “He wants that splashy headline to be sued by Elon Musk and Tesla, I guess.”
The Progressive Conservatives then provided documents to media suggesting Manitoba had contracts with the SpaceX for computer and internet hardware in the $24,000 range for 2023-24 and 2024-25. The contract amount increased to just under $122,000 in 2025-26.
Opposition Leader Obby Khan criticizes the NDP on Thursday over a procurement contract it increased with Elon Musk-owned SpaceX last year. The NDP say that increase was associated with shoring up Starlink emergency communication services during the unprecedented wildfire season last year. (Bryce Hoye/CBC)
The province said the increase last year was associated with shoring up emergency communications infrastructure amid Manitoba’s unprecedented wildfire season last year.
An NDP spokesperson said in a statement that in light of the increase in climate-related emergencies, the “government has taken steps to ensure emergency responders and communities have the tools they need … including access to technology to help maintain communication when traditional networks are disrupted.”