California Gov. Gavin Newsom is rolling out a plan to offer rebates to those who buy electric vehicles except for Tesla — a move that was blasted as “insane” by company CEO Elon Musk, who has emerged as a fierce critic of the Democrat and a backer of President-elect Donald Trump.
Newsom on Monday released details of a plan that would extend the now-expired Clean Vehicle Rebate Program if Trump follows through on a pledge to eliminate a federal tax credit for people who buy electric cars.
Trump previously vowed to end federal electric vehicle tax credits, which are worth up to $7,500 for new zero-emission vehicles.
There’s also a $4,000 credit for used ones.
But Trump later softened his stance as Musk became a supporter and adviser.
California’s defunct Clean Vehicle Rebate Program offered rebates on electric cars as high as $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 that is subject to negotiation with the state Legislature.
Musk called Tesla’s possible exclusion “insane” in a post on X. He noted that Tesla is the only company that manufactures its EVs in California.
About 42% of rebates went to people buying or leasing Tesla vehicles under the state’s previous clean vehicle rebate program, according to data from the California Air Resources Board.
Newsom on Monday called the state Legislature to convene in a special session to help “Trump-proof” 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, calling out the high cost of living in California and the state’s homelessness crisis.
Trump said Newsom was “stopping all of the GREAT things that can be done to ‘Make California Great Again.’”
Newsom’s office said the move to exclude Tesla is made in order to allow other competitors to “take root.”
“Consumers continue to prove the skeptics wrong – zero-emission vehicles are here to stay,” Newsom 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.”
Dan Ives, senior analyst at Wedbush, said Newsom’s proposal was a “political move” that could set off a “Game of Thrones battle” between the Democrat governor and Musk, the world’s richest person.
“This is clearly a political move of Newsom and California towards Musk which now has a front seat to the Trump White House and will be a key player in ultimately getting these federal tax credits wiped away among a myriad of other things on the federal front,” Ives said.
The Wedbush analyst said that Newsom’s proposal runs the risk of Musk deciding to move more jobs from Tesla’s Fremont, Calif. plant to its Austin, Texas Gigafactory.
In 2021, Musk relocated Tesla headquarters from Palo Alto, Calif. to Austin after publicly clashing with state regulators over Covid-era restrictions and lockdowns.
In July, Musk said that he would move X and SpaceX out of California and into Texas. The mogul said that the “final straw” was a new law signed by Newsom that bans school districts from requiring teachers to notify parents of changes to a child’s gender identity.
With Post wires
