US electric automaker Tesla has won a lawsuit against Canada's most populous province of Ontario after its new government scrapped a rebate initiative for electric car purchases.

The Electric and Hydrogen Vehicle Incentive Program, launched by the previous Ontario Liberal administration, offered rebates of up to Can$14,000 (US$11,000) on qualifying vehicles.

But the program was scrapped along with other Ontario green energy initiatives when a new Tory government came to power in July.

The government told AFP it is reviewing the ruling and "will make a decision on how to proceed in the coming days."

Tesla spokeswoman Gina Antonini said: "We're pleased with the court's decision to strike down the ministry's transition plan as unfair and unlawful."

"Tesla only sought fair treatment for our customers and we hope the ministry now does the right thing by delivering on its promise to ensure all EV-owners receive their incentives during the wind-down period," she said.

Tesla's suit centered on the exclusion of hundreds of Tesla buyers from a transition plan that allowed customers who bought other electric cars before July to remain eligible for rebates until mid-September.

In its complaint, Tesla slammed the "arbitrary" exclusion, saying it put its customers into an "unfair position of no longer being eligible for the rebate they had expected to receive when they ordered their vehicles, while purchasers of other brands and from other dealers will still receive the rebate during a transition period."

It asked the Ontario Superior Court of Justice to strike down the limitation of the transition program that excluded Tesla customers waiting on some 600 Model 3 vehicle orders.

In a scathing ruling, Justice Frederick Myers called the government's decision favoring some electric car buyers but not others "egregious."

He acknowledged the government's right to cancel the subsidies, but said that Ontario unlawfully "singled out Tesla for reprobation and harm."

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