Toronto taxi drivers looking to go electric will no longer get money-saving EV incentives when choosing Tesla. Citing U.S. trade tensions, Toronto has excluded Tesla from its city incentive program, pushing drivers toward alternative EV brands.
What’s happening?
In recent years, Toronto has encouraged taxi and for-hire drivers to switch to clean energy vehicles by giving owners a reduced licensing fee and renewal fees. The policy does not include reduced fees for Uber and Lyft drivers.
The standard license and permit renewal fee for a Taxicab Owner Licence in Toronto is currently $1,111.63 CAD. Zero-emission vehicles can receive a 50% reduction in these fees.
But Tesla EVs are no longer eligible for the incentive. Toronto Mayor Olivia Chow told Reuters the close relationship between Tesla CEO Elon Musk and President Donald Trump is to blame on the heels of a brewing trade war between Canada and the U.S. sparked by tariffs imposed by Trump.
While Musk holds no elected position in the U.S. government, he has significant political influence as an advisor and top donor to Trump. Musk was recently given a position in the controversial Department of Government Efficiency and is a common presence in Trump’s White House.
According to Driving, fewer than a dozen Tesla vehicles are currently getting fee reductions in Toronto, which is “less than five grand in sacrificed fees.” With that in mind, Chow said the move is “more symbolic” than attempting to make a financial impact.
Why is Toronto’s anti-Tesla stance important?
Toronto’s anti-Tesla stance reflects broader trouble for the clean-energy automaker. Tesla is one of the largest EV manufacturers in the world, second only to Chinese EV manufacturer BYD. While Toronto’s decision to exclude Tesla from incentives is unlikely to impact sales significantly, the move highlights how Musk’s ties to Trump are impacting Tesla’s business — and potentially harming EV adoption.
Musk’s controversial statements and political involvement — including calls to eliminate up to $700 billion in Social Security and Medicare spending — appear to be harming public opinion of the automaker’s vehicles, which have long been considered a top EV choice. Analysts attribute Tesla’s recent struggles to “brand damage.” Protests have recently hit Tesla showrooms nationwide, while Business Insider reports the used car market has been “flooded” with Teslas.
Financial incentives play a crucial role in encouraging drivers to purchase EVs — and Toronto’s removal of incentives could discourage taxi drivers from making the switch. Widespread adoption of EVs is crucial for reducing environmental pollution as EVs produce no planet-warming emissions when driven, unlike gas-powered cars, which run on dirty energy. Cutting incentives, then, could hinder progress toward a cleaner future.
What’s being done to promote EVs in Toronto?
Toronto will still provide incentives to for-hire drivers purchasing EVs from other automakers to encourage drivers to adopt cleaner vehicles.
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“The vehicles for hire, like taxis, will have to find a different kind of car,” Chow told Reuters. “There are other electric cars they could purchase.”
Chow added that the exclusion will continue until trade issues with the U.S. are resolved.
Chow told Reuters, “We have certainly said that if you want to buy a Tesla, go ahead — but don’t count on taxpayer money to subsidize it.”
Canada’s nationwide EV rebate program was recently paused due to a lack of funds, marking another EV setback. Notably, Tesla reportedly tried to claim $43 million CAD in rebates days before the program ended, which led to accusations of the automaker “gaming” the system. Tesla’s influx in rebate claims is currently under investigation.
When the nationwide rebate program is reinstated, Tesla will be excluded. Canadian officials told The Toronto Star that Tesla vehicles will not be “eligible for incentives so long as the illegitimate and illegal U.S. tariffs are imposed against Canada.”
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