California Gov. Gavin Newsom is encouraging constituents to buy electric vehicles by offering partial refunds in a new proposal. However, buyers of vehicles sold by Tesla Inc. will not be included in the proposal, an addition which prompted an indignant response from Tesla CEO Elon Musk.
On Monday, Newsom shared plans to renew the expired Clean Vehicle Rebate Program provided that President-elect Donald Trump follows through on his previous promise to end federal electric vehicle tax credit, worth up to $7,500 for new zero-emission vehicles and $4,000 for some used ones.
42% of rebates went to Tesla owners when the program was previously enacted, before it was phased out in 2023.
If Trump repeals a federal subsidy, Newsom intends to offer rebates to electric vehicle buyers. However, buyers of Tesla vehicles will be excluded from this program. Newsom stated that this was because of market share limitations, and the program would at least exclude Tesla's popular models, according to the East Bay Times.
"It's about creating the market conditions for more of these car makers to take root," said the governor's office, whilst also noting that Tesla's omission from the program could change following negotiations.
"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."
Musk took to X (formerly Twitter) to express his opinion on the California proposal, noting that Tesla vehicles would be excluded from it "even though Tesla is the only company who manufactures their EVs in California!"
"This is insane," he continued.
Musk, who has established himself as a strong supporter and close ally of President-elect Donald Trump, has previously stated that he is okay with the removal of federal subsidies. However, this proposal would exclude Tesla from an incentive program encouraging California residents to purchase more electric vehicles.
"This is a slap in Tesla's face," said Gene Munster, managing partner of Deepwater Asset Management.
Newsom also called for his state's legislature to convene in a special session on Monday in order to "Trump-proof" state laws and increase funding to the state attorney general's office.
Trump took to social media to criticize Newsom, saying that he was "stopping all of the GREAT things that can be done to 'Make California Great Again.'"
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