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Billionaire Elon Musk responded negatively Tuesday to reports that California Gov. Gavin Newsom intends to snub his electric vehicle company, Tesla.

According to multiple media outlets, Newsom plans to offer tax credits/rebates to electric vehicle purchasers if President-elect Donald Trump repeals a Biden-era federal EV subsidy.

“We will intervene if the Trump administration eliminates the federal tax credit, doubling down on our commitment to clean air and green jobs in California,” he 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,” he added.

The catch is that Newsom evidently intends to at least initially exclude Tesla from the tax credits/rebates giveaway.

“His office [confirmed] that the current proposal includes market-share limitations that would exclude Tesla’s popular EV models,” according to Bloomberg.

“The details — including Tesla’s possible omission from the credits — will be negotiated with the state legislature and could change, Newsom’s office said,” the reporting continued.

The alleged reason for the snub would be that Tesla already owns a significant share of California’s EV market, and ultimately, the EV credits/rebates program is simply about incentivizing more market innovation and competition.

Musk nevertheless did not respond kindly to the news:

“Even though Tesla is the only company who manufactures their EVs in California!” he tweeted Tuesday afternoon. “This is insane.”

Gene Munster, the managing partner of Deepwater Asset Management, agreed.

“This is a slap in Tesla’s face,” he told Bloomberg.

Why would Newsom exclude Tesla? Bloomberg speculated that it may be for political reasons.

“Excluding Tesla could burnish Newsom’s standing on the left as he renews a clash with Musk, who has become a member of Trump’s inner circle and accepted a role helping the incoming administration cut government spending,” the outlet noted.

The EV mandate that Trump intends to eliminate pays out $7,500 for a new EV and $4,000 for a used one.

What remains unclear is whether he’ll be successful in eliminating it.

“Mr. Trump cannot unilaterally eliminate the electric vehicle tax credits, which are part of the Inflation Reduction Act of 2022,” according to the New York Times.

“Congress would have to amend the law or pass a new one to erase the credits. But his transition team has indicated that the president-elect wants the credits gone,” the Times notes.

The same goes for Newsom, ironically enough, in that he’d need the help of his state’s legislature to move forward with the credits/rebates plan.

It should be noted that the plan isn’t new or unique. California previously ran a credits/rebates plan from 2010 to 2023.

“The structure of the program changed over time but began with a $5,000 direct-to-consumer rebate for battery electric vehicles that eventually increased to $7,500,” the Times notes.

Meanwhile, some California residents like Clio Bavalee and her husband are rushing to buy an EV before Inauguration Day, lest Trump is successful in eliminating the credits/rebates program.

“The clock is ticking because we feel like these rebates are what has made the difference for us to be able to buy the EVs,” she told the Times. “The fear that these rebates will go away is making it so that we’re really under pressure to figure out and buy.”

Alvin Shin, the president of the Tesla Owners East Bay car club, has reportedly been telling his club’s members to get themselves an EV immediately if they want one.

“If they are going to make a decision, they should make it by the end of the year,” he told the Times. “Better now than the unknown.”

Regarding Musk, he previously voiced support for eliminating the federal EV subsidy.

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Vivek Saxena
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