Gavin Newsom is one of those guys who hates losing.
As President-elect Donald Trump plans to lift the electric vehicle “mandate” and end the $7,500 tax credit for EV buyers, California's governor also plans to offer a tax credit of his own. It's standing up.
The move will remove market leader Tesla from a major incentive program aimed at boosting EV adoption as growth in all-electric vehicles slows.
Unless you're buying a Tesla, you can pay for yourself by buying an EV in California.
Will it penalize the only U.S. car company manufacturing electric cars in California? If you're someone who hangs out on Hollywood Boulevard wearing clothes like Spider-Man, it makes perfect sense.
Well, I think there is a solution to Newsom's insanity. He may be aiming to run for president in 2028. And what better way to attack Trump than by taking aim at his famous supporter, Elon Musk?
In other words, Newsom's plan to restart a rebate program that will be phased out in 2023 is not about Californians, the environment or the auto industry. This is one-upmanship, pure and simple.
Newsom's office told Bloomberg News that the current proposal includes market share limits that exclude Tesla's popular electric models. Details, including Tesla's omission from the credit, are being negotiated with the state Legislature and are subject to change. But it's clear that this plan is intended to harm Tesla.
Musk, Tesla's billionaire CEO, wrote on X that the proposal was “insane,” citing the automaker's manufacturing presence in the state.
The move will remove market leader Tesla from a major incentive program aimed at boosting EV adoption as growth in all-electric vehicles slows. Tesla's models qualify for current federal credits introduced as part of President Joe Biden's signature climate bill, the Suppressing Inflation Act.
Eliminating Tesla could strengthen Newsom's left-leaning position as he faces renewed conflict with Musk, who has joined Trump's inner circle and assumed a role in helping the incoming administration cut government spending. Musk said he wouldn't mind if federal subsidies were eliminated.
Tensions between Mr. Musk and Mr. Newsom have been tense for years, ever since the Tesla chief moved the automaker's headquarters to Texas in 2021, citing dissatisfaction with California politics.
At an earnings conference, Musk angrily criticized the state's order to close Tesla's Fremont, Calif., factory amid the COVID-19 pandemic, branding the factory “fascist.” was. When Musk announced the company's headquarters move, Newsom credited some of Tesla's success to California.
Tesla still accounts for more than half of all new EVs sold in California, but its market dominance is waning.
According to the California New Car Dealers Association, the company's sales in California fell 12.6% year over year in the first three quarters, even though EV sales increased 1% across the state. Tesla produced 54.5% of all EVs registered in the state in the first three quarters, down from 63% in the same period last year.
Once the new tax credit plan is finalized, we will update you here.
