The ongoing trade tensions between the U.S. and Canada got a little more … targeted Monday. The city of Toronto announced Tesla vehicles will no longer be eligible for the city’s EV incentives for taxis or ride share vehicles.
Toronto Mayor Olivia Chow announced Tesla vehicles will not be eligible for incentives aimed at encouraging taxi owners to buy EVs.
The move comes just days after Tesla officials expressed concern about U.S. companies being unfairly harmed by President Donald Trump’s current tariffs and, or especially, his plan to reinstate the suspended tariffs on vehicles and components.
Toronto’s been encouraging the use of electric vehicles by taxi owners by reducing their licensing fees and renewal fees. The move aims to reduce air pollution in the Canadian city, which is one of the largest in the world.
Not a surprise
Since the implementation of increased tariffs by the Trump administration, Canada has responded with its own set of levies ranging from bourbon to electricity (which was rescinded) and more.
“U.S. exporters are inherently exposed to disproportionate impacts when other countries respond to U.S. trade actions,” Tesla said in a letter to the U.S. Trade Representative’s Office, according to a Reuters report.
Musk’s involvement in politics, and the Trump administration specifically, has been problematic for the EV maker.
“For example, past trade actions by the United States have resulted in immediate reactions by the targeted countries, including increased tariffs on EVs imported into those countries.”
However, Tesla officials were addressing big-picture moves against the entire industry in its appeal to the Trump administration, not something targeted at the company itself.
Elon’s involvement
The tariffs are obviously a massive issue, but Tesla CEO Elon Musk’s involvement with the Trump administration as a senior adviser has given critics, and now, government officials, like Toronto Mayor Olivia Chow, a specific target to aim for as they look to fight back.
“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.”
“We have certainly said that if you want to buy a Tesla, go ahead, but don’t count on taxpayer money to subsidize it,” she added.
Despite recent hits to sales and earnings, Tesla CEO Elon Musk believes sales could rise 20% in 2025.
The exclusion, which began March 1, will continue until trade issues with the U.S. are resolved, she said. Chow also acknowledged the move isn’t expected to have a big impact. “It’s more symbolic,” she said.
While it’s a token measure financially, it highlights the impact that Musk’s involvement in politics can have on Tesla. The company’s sales dropped by double-digit percentages in the last year, and the company’s become the center of attacks by protestors.
Some of the moves by the anti-Musk activists have been simple, such as bumper stickers, but some have become violent with Tesla Superchargers set on fire. As a result, times have been tough for Tesla investors lately.
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Stock fall
Trump has sent confusing signals about tariffs. He’s also falsely claimed countries like Canada and Mexico would pay higher duties.
Despite selling just 1.8 million vehicles in 2024, it hit a peak share price of $488.54 last December, driven in large part by Musk’s close association with then President-elect Donald Trump. Its market capitalization topped $1.5 trillion — more than the next dozen most valuable automakers combined.
Investors, however, seem far from convinced, if anything, growing more concerned by the day. As it approaches three months since Tesla shares hit their peak, the automaker’s shares have lost roughly half their value, dropping below $240 last week.
The company’s leveled off into the high $230 range for the past few days, but that’s a far cry from nearly $500 a share less than four months ago.
And while there are plenty of headwinds that could help explain the current sell-off, more and more investors and analysts are pointing in one particular direction: Musk and his involvement with the Trump administration.
That should affect about 3 vehicles a year.
LOL, a lot more than you realize, based on the level of incentives for EVs — and what we see in ride-share fleets in places like LA and San Francisco. Still, Toronto officials admitted the move is “symbolic.” But a big increase in tariffs nationwide would hurt Tesla badly in Canada where it has generated reasonably good volume up until this year.
Paul E.