Musk Blasts Newsom Over Proposed EV Rebate Excluding Tesla

Tesla CEO Elon Musk sharply criticized California Governor Gavin Newsom after Newsom proposed a plan that could exclude Tesla vehicles from a new state rebate program for electric vehicles (EVs). The potential exclusion comes as part of Newsom’s strategy to counteract federal policies if President-elect Donald Trump removes existing federal tax credits for zero-emission vehicles (ZEVs).

Newsom’s office told Bloomberg News that the proposed California Clean Vehicle Rebate Program would include “market-share limitations” designed to encourage competition among EV manufacturers, effectively leaving Tesla, the nation’s leading EV producer, out of the mix.

“This is a slap in Tesla’s face,” remarked Gene Munster of Deepwater Asset Management.

Musk was even more direct, blasting the proposal on X: “Even though Tesla is the only company who manufactures their EVs in California! This is insane.”

Musk’s frustrations with Newsom and California’s governance are nothing new. In May 2020, amid COVID lockdowns that forced Tesla’s factory to shut down, Musk described California’s shelter-in-place orders as “fascist” and a violation of constitutional freedoms.

Later that year, Musk relocated to Texas, citing California’s “hostile” business environment. By 2024, tensions between Musk and Newsom reached new heights when the governor signed AB 1955, barring schools from notifying parents about their children’s gender identities. Musk condemned the law, warning that it would lead families and businesses to leave the state.

In response, Musk announced he was moving SpaceX headquarters from Hawthorne, California, to Starbase, Texas, and X headquarters to Austin, calling it “the final straw.”

Musk’s most recent clash with Newsom follows years of criticism over California’s leftist policies, which Musk claims have fueled crime, homelessness, and an exodus of families and businesses.

In July, Musk declared Newsom’s “career is over,” and reiterated his belief that California’s policies, particularly regarding gender ideology in schools and the mishandling of public safety, are damaging the state’s economy and social fabric.

Author and former gubernatorial candidate Michael Shellenberger echoed Musk’s sentiment, accusing Newsom of turning California into a “failed state.”

Tesla remains a key player in California’s EV market, producing its vehicles in the state and qualifying for federal EV incentives under President Biden’s Inflation Reduction Act. Despite this, Newsom’s latest proposal could further strain Tesla’s ties to California.

The dispute underscores a broader clash between progressive governance and business innovation. As Newsom seeks to redistribute support for smaller EV manufacturers, Musk continues to champion Tesla as the backbone of America’s EV revolution, while warning against the consequences of overregulation.

With Musk increasingly vocal about his disdain for California’s policies, the question remains whether Tesla will remain a fixture in the Golden State or continue its exodus to Texas.

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