Trump freaks out as Canada officially banned Tesla from special EV program – a crushing blow to Musk

In a move that has sent shockwaves through both political and business circles, Canada has officially excluded Tesla from its new federal electric vehicle (EV) incentive program—prompting a fiery response from former U.S.

President Donald Trump and creating what some analysts are calling a major setback for Elon Musk.The decision not only limits Tesla’s access to Canadian subsidies but also raises deeper questions about international trade tensions, green energy politics, and Musk’s once-dominant position in the global EV market.

The program in question, launched as part of Canada’s ambitious 2025 Clean Transport Initiative, offers major tax breaks and purchase incentives for electric vehicle buyers—provided the vehicle meets specific criteria related to manufacturing location, supply chain transparency, and parts sourcing.

While other major automakers like Ford, GM, and Volkswagen were granted eligibility, Tesla was notably left off the approved list, with Canadian officials citing “noncompliance with domestic assembly and sourcing requirements” as the reason.

The announcement triggered an immediate and aggressive reaction from Donald Trump, who has long positioned himself as a defender of American business interests—even more so when it involves companies he sees as symbols of American innovation.

Within hours of the news, Trump took to his social media platform, calling the decision “a disgraceful betrayal” and accusing Canada of “stabbing America in the back.”
He also launched into a tirade against Prime Minister Justin Trudeau, claiming the Canadian government was “favoring weak foreign automakers over the best we have.”

Trump’s outrage wasn’t just political—it was personal.

He has often praised Elon Musk in recent years, referring to him as a “genius” and a “great patriot,” despite their occasionally strained history.

By framing Canada’s move as an attack on Musk, Trump aimed to ignite a new wave of nationalist fervor among his base and place further pressure on President Joe Biden to respond in kind.

Meanwhile, Musk himself has remained uncharacteristically quiet.

Normally quick to react to regulatory developments or international snubs, he has yet to make a formal statement regarding the ban.

However, insiders say Tesla executives are “furious” and “deeply disappointed” by the decision, as Canada represents a significant and growing market for EVs—and the exclusion could lead to millions in lost sales.

Tesla supporters argue that the company’s exclusion is purely political and not based on actual manufacturing or environmental standards.

They point out that Tesla’s Gigafactory in Austin, Texas, is among the most advanced EV production plants in the world and that Tesla already complies with most environmental regulations in North America.

Some have accused Canada of bending to pressure from traditional auto lobbyists who fear Tesla’s market dominance.

Canadian officials, however, are standing firm.

A spokesperson from the Ministry of Innovation, Science and Industry stated that the program’s design prioritizes “localized manufacturing, North American supply chain integrity, and long-term economic sustainability.

”
They further claimed that Tesla had failed to meet documentation deadlines and had not submitted a revised sourcing plan to align with the initiative’s standards.

Industry experts say the real issue may lie in Tesla’s famously independent supply strategy.

While other automakers have recently shifted operations to meet North American regulatory expectations—including retooling factories and forming local battery partnerships—Tesla has continued to rely heavily on international suppliers, particularly for battery materials.

That autonomy, once considered a strength, may now be holding the company back in increasingly protectionist markets.

The situation also puts additional pressure on the Biden administration, which has promoted EV expansion as a key part of its climate policy.

If Canada and the U.S.

diverge in their treatment of Tesla, it could complicate cross-border EV trade, further strain the USMCA trade agreement, and trigger retaliatory measures.

Already, some American lawmakers aligned with Trump are calling for punitive tariffs on Canadian-made vehicles or a suspension of joint clean energy initiatives.

The financial markets have responded cautiously.

Tesla stock dipped slightly in after-hours trading following the announcement, though not dramatically.

Analysts warn that a prolonged exclusion from major international subsidy programs like Canada’s could erode Tesla’s competitive advantage, particularly as legacy automakers rapidly scale up their own EV lines with full government support.

At the consumer level, some Canadians who had placed deposits on Tesla vehicles are now expressing frustration, unsure if they will still qualify for any rebates.

Others have begun reconsidering their options, turning to EV brands that are included in the program.

Car dealerships across Canada report a spike in inquiries for Ford’s Mustang Mach-E and Volkswagen’s ID.

4 since the announcement went public.

In the broader landscape, this moment signals a turning point for Tesla.

Once the uncontested leader of the EV revolution, the company is now facing coordinated resistance from both governments and competitors.

What began as a race for innovation has transformed into a battle for regulation, supply chain control, and geopolitical alignment.

As for Trump, his furious response has reinserted him into a narrative that blends commerce with nationalism—something he has long used to galvanize his political base.

Whether it results in policy changes remains to be seen, but one thing is certain: the former president has once again found a way to center himself in a fight that reaches far beyond America’s borders.

With Elon Musk caught in the crossfire, and Tesla’s global dominance suddenly under threat, the stakes are higher than ever.

And as governments continue to redraw the rules of the EV market, one wrong move could send even the biggest players skidding off the road.