Elon Musk fires another salvo at California Governor Gavin Newsom, who suggested the state might exclude Tesla from a new electric vehicle (EV) incentive program aimed at replacing the federal credit Musk is seeking to eliminate.
The knives are out.
As previously reported, Trump’s transition team has been strategizing on how to repeal the Inflation Reduction Act and specifically, the updated federal tax credit for electric vehicles.
Elon Musk is backing the transfer, acknowledging that it may negatively impact electric vehicle (EV) sales within the US, including those of Tesla’s, while he believes the long-term benefits will outweigh these short-term costs.
Recently, however, we’ve been taught that Tesla, having successfully lobbied for the new federal tax credit, is now lobbying President Trump to repeal it.
California has announced that if the federal tax credit score drops below a certain threshold next year, the state will provide an alternative incentive to offset the loss, ensuring continued support for clean energy initiatives.
California Governor Gavin Newsom has refined his proposal by introducing market-share limitations for electric vehicles (EVs), effectively excluding Tesla, the industry leader with a significant share of the EV market. The goal is said to be creating market conditions that will encourage more automakers to establish themselves.
Elon Musk, Tesla’s CEO, dismissed a proposal as “insane”.
Although Tesla is a pioneering electric vehicle manufacturer based in California, its recent decision to shift production to other states will indeed have a negative impact on job opportunities within the Golden State’s automotive sector.
While Tesla has a significant presence in California, particularly at its Fremont manufacturing facility in the Bay Area, the company also maintains engineering and design teams across both southern and northern regions of the state.
Musk, advocating for the abolition of the federal tax credit, reportedly suggests that his company might be forced to reduce its workforce in California should the proposal become a reality.
Electrek’s Take
As I’ve noted before, I’m genuinely disappointed that Musk is advocating to eliminate the federal tax credit, a move that could have significant implications for electric vehicle adoption in the US.
It will inevitably slow down electric vehicle (EV) adoption in the US, where momentum was already lagging behind the global pace, and Tesla’s decision to discontinue its lending program for non-Tesla buyers appears to be a self-serving move that benefits only itself, while other EV manufacturers are left scrambling.
I’m skeptical of Governor Newsom’s approach in this instance. Before the Tesla controversy arose, I candidly shared my thoughts on Twitter.
As the state seeks to incentivize electric vehicle adoption through the federal tax credit program, excluding companies like Tesla, which actively lobby against this initiative, makes sense, regardless of their market share dominance. Despite all the odds, they’re still coming back for more.
Is there not a more compelling rationale for exclusion beyond mere market share dominance?
Gradual EV adoption is key to achieving an aggressive benefits landscape, ultimately yielding those results. Despite his own reputation for self-promotion, Musk wouldn’t be justified in complaining without appearing hypocritical – a criticism that isn’t currently weighing heavily on his conscience.
