California EV Rebates May Omit Tesla Models
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Tesla Inc.’s electric vehicles would be excluded from consumer rebates proposed by California’s governor, a decision by state lawmakers aimed at spurring greater competition that’s likely to draw the ire of Elon Musk.
California Governor Gavin Newsom on Nov. 25 unveiled plans to offer state incentives to EV buyers if U.S. President-elect Donald Trump repeals a federal subsidy after he takes office next year. Newsom, a prominent Democrat and frequent critic of Republican politics, said in a statement that a program California phased out in 2023 could be rebooted to provide car buyers relief in lieu of a $7,500 tax credit targeted by Trump.
The governor’s office told Bloomberg News that the current proposal includes market-share limitations that would exclude Tesla’s popular EV models. The details will be under negotiation with the state legislature and could change.
“It’s about creating the market conditions for more of these car makers to take route,” according to the governor’s office.
The move would cut market-leading Tesla out of a key incentive aimed at spurring wider adoption of EVs at a time of slowing growth in the market. Tesla’s models do qualify for the federal credit.
The relationship between Musk and Newsom was already tense before Tesla’s chief executive officer decided to move Tesla’s headquarters to Texas. Musk had angrily denounced state orders to close Tesla’s Fremont factory during the COVID-19 pandemic, labeling them “fascist” in an earnings call. When Musk announced the headquarters move, Newsom said Tesla owed some of its success to California.
California clashed with Trump frequently on auto emission regulations during the incoming president’s first term, and the state’s leaders have made clear they are now girding for another fight. Newsom already has sought to shield the state’s policies on issues including reproductive rights, climate and immigration from potential threats under a Trump administration.
Tesla shares were down 1% as of 1:22 p.m. in New York.
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