Tesla Stock: Fraud Allegations Hit Already Struggling Shares

Tesla faces serious allegations of manipulating Canada's electric vehicle subsidy program, further damaging its stock which has already fallen 39% this year. Canadian authorities are investigating claims that Tesla submitted applications for 8,653 vehicle rebates worth CAD 43.1 million in just three days-more than half of the remaining program funds. These numbers appear suspicious as they exceed Tesla's entire first-quarter sales in Canada, especially considering the company's Canadian sales had recently dropped by approximately 70%. The investigation comes at a particularly challenging time for Tesla, which Goldman Sachs now categorizes among the "Maleficent 7"-former market stars now contributing to market weakness.

Trade Conflict Concerns Compound Problems

The Canadian subsidy controversy adds to Tesla's growing list of challenges. The Texas-based automaker has warned US trade representatives about potential retaliatory tariffs from trading partners responding to aggressive American trade policies. In a March 11 letter, Tesla expressed concern that such measures could increase manufacturing costs and reduce the competitiveness of US-made vehicles in international markets. The company also urged against imposing additional import costs on critical raw materials like lithium and cobalt that are scarce in the US, as both the EU and Canada have threatened comprehensive countermeasures to US steel and aluminum tariffs.