Gavin Newsom plans to defy Donald Trump as he stiffs key MAGA ally Elon Musk, while California plans an electric vehicle rebate program that deliberately leaves out Tesla.
California’s governor plans to introduce a state tax credit on the purchase of electric cars if the Trump administration eliminates the federal tax cut.
Newsom even bragged that his policies have made Tesla and Musk “so damn successful.”
The new discounts could exclude Tesla and other automakers with large market shares in an effort to promote more competition, the governor’s office said. But that must be negotiated with the state legislature.
Tesla has 55% of the EV market share in California, up from 64% a year ago. Hyundai and BMW are the next two largest EV sellers in the state, with just 6.4% and 5.5% respectively.
Musk, whose company is the only one that actually produces electric cars in the Golden State, clearly felt left out and denounced Newsom’s proposal.
‘Even though Tesla is the only company that produces its electric cars in California! This is insane,” he wrote on X.
A Musk fan posted a video on the social media site of Newsom gloating about his responsibility for Musk and Tesla’s wealth.
“It’s one of the reasons why guys like Elon Musk and others have become so damn successful.” Newsom said in October. “It’s because we’ve given price signals, we’ve created markets and we’ve created opportunities for investment. We are the number one manufacturer for a reason. We remain the envy of the world.”
Gavin Newsom’s attempts to defy Donald Trump have now hit key ally Elon Musk, as California plans an electric vehicle rebate program that doesn’t include Tesla
Musk, whose company is the only one that actually produces electric cars in the Golden State and has 55% of the EV market share in California, has rejected Newsom’s proposal.
About 42% of the rebates went to people who bought or leased Tesla vehicles under the previous clean vehicle rebate program, according to data from the California Air Resources Board.
Newsom is essentially calling for the creation of a new version of the state’s Clean Vehicle Rebate Program, which was phased out in 2023 after financing 594,000 cars and saving what he says are 456 million gallons of fuel. The program offered rebates on electric cars of up to $2,500.
“Consumers continue to prove the skeptics wrong: Zero-emission vehicles are here to stay,” Newsom said in a statement.
‘We’re not returning to a clean transport 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 make good on his campaign promises, “including ending attacks on gasoline-powered cars.”
“When he takes office, President Trump will support the auto industry, creating space for both gas 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 did not say how much the program would cost or how the rebates would work.
A Musk fan posted a video to the social media site of Newsom gloating about his responsibility for Musk and Tesla’s wealth
Trump has softened his position when Tesla CEO Musk became a supporter and advisor
California has surpassed 2 million zero-emission vehicle sales, according to Newsom’s office.
The state has pursued policies in recent years to move away from fossil fuel-powered cars, trucks, trains and lawnmowers.
Trump previously promised to end federal tax credits for electric vehicles, which are worth up to $7,500 for new zero-emission vehicles.
There is also a $4,000 credit for used copies. But Trump later softened his stance when Tesla CEO Musk became a supporter and advisor. Musk has said he supports ending subsidies for electric vehicles, oil and gas.
The proposal is part of his plan to protect California’s progressive policies ahead of new Republican President Donald Trump’s second term.
He called on the state Legislature to meet in a special session to “Trump-proof” state laws by giving the attorney general’s office more funding to take on federal challenges.
But a budget deficit 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.
Trump previously promised to end federal electric vehicle tax credits, which are worth up to $7,500 for new zero-emission vehicles
About 42% of the rebates went to people who bought or leased Tesla vehicles under the state’s previous clean vehicle rebate program, according to data from the California Air Resources Board.
That’s an improvement over the estimated $46.8 billion deficit the state faced last year, but the shortfall could still limit the state’s ability to expand new programs and fight federal legal challenges to go.
Legislative leaders in both chambers have said the state must remain cautious ahead of future budget shortfalls.
Trump criticized Newsom on social media after the governor called for a special session, addressing California’s high cost of living and the state’s homelessness crisis.
The president-elect said Newsom was “holding back all the GREAT things that can be done to ‘Make California Great Again.’
Newsom said on his podcast earlier this month that he contacted Trump after the election.
He said at a press conference last week that he had still not heard from the newly elected president.
Musk and Newsom have clashed over state policies such as the closure of Tesla’s Fremont factory during the pandemic and California’s passage of a bill on transgender children.
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.