In a strategic move that could be linked to ongoing tensions over Canada-U.S. trade relations, Toronto Mayor Olivia Chow announced plans to exclude Tesla vehicles from the city’s Zero Emissions Grant program. This decision, which will go into effect on March 1st, is a direct response to rising tariff threats between the two countries. If the motion passes, ride-sharing drivers who own Tesla vehicles will no longer be eligible for the city’s grant that incentivizes the transition to electric vehicles (EVs), a significant blow to those looking to renew their licenses for electric ride-sharing fleets.
The Zero Emissions Grant program was introduced in 2023 as part of Toronto’s broader initiative to decarbonize the city’s vehicle-for-hire industry. The plan aims to phase out gasoline-powered taxis and ride-sharing cars within the next seven years while encouraging drivers to make the switch to cleaner electric alternatives. However, with Tesla vehicles proving to be one of the most popular electric car choices on the market, Mayor Chow expressed her stance in a budget meeting, stating that there was no reason for the city to continue offering subsidies to the luxury automaker. She emphasized that, while drivers should continue purchasing electric cars, there were other EV brands that could qualify for the program.
This decision will not impact those taxi drivers who already own Tesla vehicles, as they will continue to operate under the current program. However, any new Tesla owners or those attempting to renew their licenses will be affected, unable to access the financial support that the grant offers.
Chow’s move follows a broader political context, as tensions between Canada and the U.S. escalate. In recent months, U.S. President Donald Trump has threatened Canada with tariffs, and various political figures in Canada, including Ontario Premier Doug Ford, have considered countermeasures against Tesla and its CEO, Elon Musk. Ford even suggested canceling a contract with SpaceX, Musk’s satellite internet service, while Chrystia Freeland, who is running for leadership of the federal Liberal party, proposed tariffs specifically targeting Tesla.
While Chow did not explicitly link her decision to Musk or the ongoing trade dispute, she did acknowledge that the city had other strategies in place to respond to U.S. tariffs, as part of its broader Toronto Action Plan. The timing of the motion coincides with reports indicating that Tesla raised the prices of its vehicles in Canada twice this year, with one of the increases making their cars ineligible for the federal government’s EV rebate. The second price hike appeared to be a preemptive move in anticipation of potential tariffs.
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With the deadline for tariff negotiations rapidly approaching, Mayor Chow’s decision marks a significant escalation in Toronto’s stance on EV incentives and international trade relations. Whether this will spark further action from other Canadian cities or lead to broader policy changes remains to be seen, but for now, the exclusion of Tesla from Toronto’s Zero Emissions Grant program will be a key development to watch in the ongoing tariff saga.
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