Canada has suspended all electric vehicle rebate payments to Tesla Inc (NASDAQ:TSLA) and barred the company from future federal EV incentive programmes, citing concerns over US trade actions.
Transport Minister Chrystia Freeland said no funds would be released until each claim is individually verified.
The move follows reports that a Quebec Tesla dealership filed for nearly C$20 million in rebates over one weekend in January.
The government is also revising eligibility rules to exclude Tesla while US tariffs on Canadian goods remain in place.
The freeze affects C$43 million in outstanding payments. Tensions have escalated after President Donald Trump announced new 25% tariffs on Canadian and Mexican imports, with some set to take effect in early April.
It comes a day after it was revealed that sales of new Tesla cars in Europe slumped 43% as the backlash against founder Elon Musk linked to his high-profile role with the Trump administration and his backing for Germany's far-right AfD party.