California Governor Gavin Newsom's (D) proposal to offer rebates to electric car buyers if President Donald Trump eliminates federal subsidies for EVs would exclude Elon Musk's Tesla from the program. That will happen.
bloomberg report In a move that could increase tensions between California Gov. Gavin Newsom (D) and Elon Musk, Tesla electric vehicles will be subject to consumer rebates under a new proposal announced by Newsom on Monday. It is said that he will be excluded from the program. Governor plans to offer rebates to EV buyers if President-elect Donald Trump eliminates federal subsidies, potentially restarting a program California phased out in 2023 .
Newsom's office said the current proposal includes market share limits that would exclude most or all of Tesla's EV models. Details, including the possibility of Tesla being excluded from the credit, are being negotiated with state legislatures and are subject to change. The governor's office said the move was to “create a market environment for more automakers to settle in.”
Tesla CEO Elon Musk criticized the proposal on his X/Twitter platform as “insane” and cited the automaker's manufacturing operations in the state.
Excluding Tesla from the incentive program could be a blow to the company, as it aims to boost the adoption of EVs as growth in fully electric vehicles slows. Tesla's models qualify for current federal credits introduced as part of President Joe Biden's anti-inflation law.
The move could also strengthen Newsom's left-wing position as he renews his standoff with Musk. Tensions between the two sides have been tense for years, with Musk moving Tesla's headquarters to Texas in 2021, in part due to dissatisfaction with California politics. During the coronavirus pandemic, Mr. Musk angrily criticized the state's order to close Tesla's Fremont factory, branding it “fascist.”
Tesla still accounts for more than half of all new electric cars sold in California, but its dominance in the market is waning. According to the California New Car Dealers Association, Tesla's sales in the state fell 12.6% from a year ago in the first three quarters, even as electric vehicle sales rose 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.
California has clashed frequently with President Donald Trump over auto emissions standards during the president-elect's first term, and state leaders are now preparing for a new battle. Newsom is already trying to protect the state's policies on issues such as reproductive rights, climate and immigration from potential threats under the Trump administration.
President Trump has long criticized the Biden administration's efforts to subsidize EVs to encourage the adoption of cleaner vehicles. The transition team is currently considering lowering fuel economy requirements for new cars and light trucks as part of the president-elect's plan to ease Biden's policies, which he touted as an “EV mandate.”
California, along with states such as Oregon and Colorado, currently enjoys exemptions from rules that pre-empt new vehicle emissions standards. More than a dozen states, representing more than a third of the U.S. auto market, now officially follow California's rules.
During his first term, Trump targeted California's right to set stricter fuel economy standards than the federal government, and after taking office in January, he reduced California's carve-out under the Clean Air Act of 1970. It is expected that they will try again.
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Lucas Nolan is a reporter for Breitbart News, covering free speech and online censorship issues.
