Newsom vs. Musk: The EV Rebate Showdown

Governor Gavin Newsom isn’t just doubling down on his green vision for California — he might also be reigniting tensions with Tesla.

In a bold announcement, Newsom vowed to restart state tax rebates for electric vehicle (EV) purchases if the Trump administration follows through on its promise to cut federal EV tax credits. But here’s the catch: Tesla owners might not be invited to the party.

Tesla Owners Iced out of Potential Rebates?

In a statement to Bloomberg News, Newsom’s office hinted at excluding Tesla from the potential rebates:

In classic form, the governor initially announced his plan to reinstate California’s EV tax rebates if federal incentives are cut via a formal statement on his website. But there was no mention of the bombshell proposal that followed: Tesla owners could be iced out of these rebates.

Instead of making the announcement broadly, Newsom’s office reportedly went to a single media outlet with the jaw-dropping proposal. The plan suggests a market cap on eligibility for rebates, effectively excluding Tesla — the company that made EVs mainstream and remains a leader in the space.

Tesla’s CEO Elon Musk wasted no time firing back on social media:

Show Me the Money

Currently, federal rebates offer up to $7,500 for qualified EV buyers. California’s rebates, which ran as high as $2,500, were phased out in 2023. So how would the cash-strapped state pay for this?

• Newsom says those rebates would be funded by the Greenhouse Gas Reduction Fund, fueled by polluters under the state’s cap-and-trade program.

• This fund already supports major green initiatives like clean transportation, renewable energy, and solar power programs.

California EV Market is Strong

California’s EV market is holding strong. According to the latest data from September 2024:

• EVs made up 22% of all new cars sold in the state through September 2024

• Tesla’s Model Y remains the top-selling car in California year-to-date (by far), but the company’s sales continue to slip, losing 8.5% market share compared to last year.

The Trump-Musk Factor

During his campaign, Trump vowed to ax the EV tax credits, throwing red meat to his base. But here’s the twist: Musk has major skin in the EV game and his influence could lead to some... unexpected policy pivots. Experts say for now, this should be a classic case of “wait and see.”

EVs and the Swing State Shuffle

Adding to the uncertainty are GOP-led swing states like Georgia, Michigan, and Ohio, where new battery plants and EV factories are creating jobs. Will Republican leaders risk undermining their states’ growing EV industries by slashing federal support?

What’s Next?

With the EV industry at the intersection of politics, jobs, and clean energy, Newsom’s fight with Tesla and the Trump Administration is far from over. Stay tuned for December 2, the special session in Sacramento— this one’s going to be a wild ride.

Sponsorship with Venice.Ai