California Gov. Gavin Newsom is rolling out a plan to offer discounts on electric vehicles, excluding Teslas — a move that was called “political” by critics and “crazy” by Tesla CEO Elon Musk.
Newsom on Monday released details of a plan that would extend the expiring clean vehicle rebate program if Trump follows through on a promise to eliminate a federal tax credit for people who buy electric cars.
Trump previously pledged to end federal tax credits for electric vehicles, which are worth up to $7,500 for new zero-emission vehicles.
There is also a $4,000 credit for used ones.
But Trump later softened his stance after Musk became a supporter and adviser.
The California Clean Vehicle Rebate Program offered rebates for electric cars up to $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 this is subject to negotiations with the state Legislature.
Musk called Tesla’s potential exemption “crazy” in a post on X. He noted that Tesla is the only company that makes its electric vehicles in California.
According to data from the California Air Resources Board, about 42% of the rebates went to people who bought or leased Tesla vehicles under the state’s previous clean vehicle rebate program.
Newsom on Monday called the state legislature into a special session to help “Trump-protected” 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, citing California’s high cost of living and the state’s homelessness crisis.
Trump said Newsom was “stopping all the GREAT things that can be done to make California Great Again.”
Newsom’s office said the move to exclude Tesla is to allow other competitors to “take root.”
“Consumers continue to prove skeptics wrong — zero-emission vehicles are here to stay,” Newsom said in a statement.
“We’re not going to back down from a clean transport future – we’re going to make it more affordable for people to drive vehicles that don’t pollute.”
Dan Ives, senior analyst at Wedbush, said Newsom’s proposal could lead to a “Game of Thrones battle” between the Democratic governor and Musk, the world’s richest man.
“This is clearly a political move by Newsom and California toward Musk, who now has a front-row seat in the Trump White House and will be a key player in ending the erasure of these federal tax credits among a host of things others on the federal front. “, Ives said.
The Wedbush analyst said Newsom’s proposal risks Musk deciding to move more jobs from Tesla’s Fremont, Calif., plant to its Austin, Texas, Gigafactory.
In 2021, Musk moved Tesla’s headquarters from Palo Alto, California, 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 “last straw” was a new law signed by Newsom that prohibits school districts from requiring teachers to notify parents of changes in a child’s gender identity.
By postal wire
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