California Governor Gavin Newsom has proposed a new electric vehicle (EV) rebate program that could potentially leave Tesla out, sparking tensions with Tesla CEO Elon Musk once again. The plan, unveiled on Monday, aims to provide rebates to EV buyers in case federal subsidies are repealed under the incoming Trump administration, as reported by Bloomberg.
Newsom’s office stated that the proposal includes market-share limits that may exclude Tesla, the leading player in EV sales in California. While the specifics of the plan are still being negotiated and subject to change, the ultimate goal is to incentivize more automakers to enter the EV market.
Elon Musk took to social media to criticize the proposal, labeling it as “insane” and highlighting Tesla’s manufacturing presence in California. Despite Tesla’s dominant position in the state’s EV market, the company has witnessed a decline in market share, with sales dropping by 12.6% this year while overall EV sales have seen a 1% increase.
In 2021, Tesla relocated its headquarters to Texas, citing frustrations with California’s regulations. The strained relationship between the company and the state escalated during the COVID-19 pandemic when Musk openly opposed state-mandated factory shutdowns.
Currently, Tesla’s vehicles qualify for a $7,500 federal tax credit under President Biden’s climate policy. However, Newsom’s proposed plan would replace this incentive if Trump decides to eliminate it. The move could potentially enhance Newsom’s standing among progressives while creating a divide between him and Musk, who has aligned himself with the Trump administration.
California remains at the forefront of EV policy, holding a significant share of the U.S. auto market. Newsom’s initiative is part of the state’s ongoing commitment to promote clean energy and combat any potential rollbacks on environmental regulations under the upcoming administration.
The battle for EV dominance and policy influence in California continues to unfold, with Newsom’s latest proposal stirring up controversy within the EV industry. As negotiations progress and details are finalized, the outcome of this rebate program could have significant implications for the future of electric vehicles in the state.