California Gov. Gavin Newsom is rolling out a plan to offer rebates for electric vehicles with the exception of Teslas — a move that was ripped as “political” by critics and “insane” by Tesla CEO Elon Musk.
Newsom on Monday released details of a plan that would extend the now-expired Clean Vehicle Rebate Program if Trump follows through on a pledge to eliminate a federal tax credit for people who buy electric cars.
Trump previously vowed to end federal electric vehicle tax credits, which are worth up to $7,500 for new zero-emission vehicles.
Tesla buyers will not be eligible for a rebate in California under a proposed plan from Gov. Gavin Newsom.via REUTERS
There’s also a $4,000 credit for used ones.
But Trump later softened his stance as Musk became a supporter and adviser.
California’s defunct Clean Vehicle Rebate Program offered rebates on electric cars as high as $2,500.
Newsom’s proposed rebates could exclude Tesla and other automakers in an effort to promote more market competition and innovation, according to the governor’s office. But that is subject to negotiation with the state Legislature.
Musk called Tesla’s possible exclusion “insane” in a post on X. He noted that Tesla is the only company that manufactures its EVs in California.
About 42% of rebates went to people buying or leasing Tesla vehicles under the state’s previous clean vehicle rebate program, according to data from the California Air Resources Board.
Newsom has proposed reviving the defunct Clean Vehicle Rebate Program if President-elect Donald Trump 𝓀𝒾𝓁𝓁s a $7,500 federal EV tax credit.Getty Images
Newsom on Monday called the state Legislature to convene in a special session to help “Trump-proof” state laws by giving the attorney general’s office more funding to fight federal challenges.
Trump criticized Newsom on social media after the governor called for a special session, calling out the high cost of living in California and the state’s homelessness crisis.
Trump said Newsom was “stopping all of the GREAT things that can be done to ‘Make California Great Again.’”
Newsom’s office said the move to exclude Tesla is in order to allow other competitors to “take root.”
“Consumers continue to prove the skeptics wrong — zero-emission vehicles are here to stay,” Newsom said in a statement.
“We’re not turning back on a clean transportation future — we’re going to make it more affordable for people to drive vehicles that don’t pollute.”
Tesla CEO Elon Musk (right), a key adviser to Trump (left), blasted the proposed plan as “insane.”via REUTERS
Dan Ives, senior analyst at Wedbush, said Newsom’s proposal could set off a “Game of Thrones battle” between the Democratic governor and Musk, the world’s richest person.
“This is clearly a political move of Newsom and California towards Musk which now has a front seat to the Trump White House and will be a key player in ultimately getting these federal tax credits wiped away among a myriad of other things on the federal front,” Ives said.
The Wedbush analyst said Newsom’s proposal runs the risk of Musk deciding to move more jobs from Tesla’s Fremont, Calif., plant to its Austin, Texas, Gigafactory.
In 2021, Musk relocated Tesla headquarters from Palo Alto, Calif., to Austin after publicly clashing with state regulators over COVID-era restrictions and lockdowns.
In July, Musk said he would move X and SpaceX out of California and into Texas. The mogul said the “final straw” was a new law signed by Newsom that bans school districts from requiring teachers to notify parents of changes to a 𝘤𝘩𝘪𝘭𝘥’s gender identity.
