Gavin Newsom‘s attempts to defy Donald Trump have now hit key MAGA ally Elon Musk, as California is planning an electric vehicle rebate program that intentionally leaves out Tesla.
The California governor is planning to replace a tax credit on purchasing the cars if the Trump administration eliminates the federal version of the program.
Newsom’s 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.
Tesla holds 55% of California’s EV market share, down from 64% a year ago but still essentially becoming victims of their own success. Hyundai and BMW are the next two biggest EV sellers in the state, at just 6.4% and 5.5%, respectively.
Musk, whose company is the only one that actually manufactures EVs in the Golden State, clearly felt singled out and slammed Newsom’s proposal.
‘Even though Tesla is the only company who manufactures their EVs in California! This is insane,’ he wrote on X.
A Musk fan posted a video to the social media site showing Newsom actually gloating about being responsible for Musk and Tesla’s riches.
‘It’s one of the reasons guys like Elon Musk and others have become so damn successful. It’s because we’ve set price signals, we’ve created markets, we’ve created opportunities for investments. We’re the number one manufacturer for a reason. We continue to be the envy of the world,’ he said in October.
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 is essentially asking to create a new version of the state´s Clean Vehicle Rebate Program, which was phased out in 2023 after funding 594,000 cars and saving what they claim is 456 million gallons of fuel. The program offered rebates on electric cars as high as $2,500.
‘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.’
Karoline Leavitt, a spokeswoman for Trump’s transition team, said the president-elect would deliver on his campaign promises, ‘including stopping attacks on gas-powered cars.’
‘When he takes office, President Trump will support the auto industry, allowing space for both gas-powered cars AND electric vehicles,’ she said in a statement.
Money for the new rebate system could come from the state’s Greenhouse Gas Reduction Fund, which is funded by polluters under the state´s cap-and-trade program, the governor’s office said.
Officials didn´t say how much the program would cost or how the rebates would work.
California has surpassed 2 million zero-emission vehicles sold, according to Newsom’s office.
The state has passed policies in recent years to transition away from fossil fuel-powered cars, trucks, trains and lawn mowers.
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 Tesla CEO Musk became a supporter and adviser. Musk has said he supports ending subsidies for EVs, oil and gas.
The proposal is part of his plan to protect California’s progressive policies ahead of Republican President-elect Donald Trump‘s second term.
He 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.
But a budget shortfall could complicate California´s resistance efforts.
Early budget projections show the state could face a $2 billion deficit next year, according to a report released last week by the nonpartisan Legislative Analyst´s Office.
That´s an improvement from an estimated $46.8 billion deficit the state faced last year, but the shortfall could still curtail the state´s ability to expand new programs and fight federal legal challenges.
Legislative leaders in both chambers have said the state needs to stay prudent in anticipation of future budget deficits.
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.
The president-elect said Newsom was ‘stopping all of the GREAT things that can be done to `Make California Great Again.´’
Newsom said on his podcast earlier this month that he reached out to Trump after the election.
He said at a news conference last week that he still hadn´t heard back from the president-elect.
Musk and Newsom have clashed over state policies such as shutting Tesla’s Fremont factory during the pandemic and California’s approval of a bill on transgender kids.
In 2021, Tesla moved its headquarters from California to Texas, and Musk said this year that his other companies such as SpaceX and social media platform X will follow suit.
