In recent years, Elon Musk’s Tesla has emerged as an enormously popular car company with its high-end Cybertruck appealing to star athletes and celebrities across the country. But it sounds like Musk and his company are getting some bad news from California.
Under the Trump administration, there was a promise to eliminate the federal electric vehicle tax credit, which currently provides a $7,500 federal tax rebate to buyers of zero-emission vehicles.
If this comes to pass, Governor Newsom stated that California would introduce its own rebate to replace the federal one.
“We will intervene if the Trump Administration eliminates the federal tax credit, doubling down on our commitment to clean air and green jobs in California,” Newsom said in a statement, according to Business Insider.
“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.”
While this may seem like positive news for Musk and Tesla at first, it’s worth noting that the new rebate would likely exclude Tesla as Newsom’s office confirmed to Business Insider that the proposed rebate program would likely impose a market-share cap.
A market-share cap would prevent companies whose sales represent a large percentage of total electric vehicle sales from receiving the rebate. Since Tesla is the leading electric vehicle manufacturer in California, it would almost certainly be excluded from the rebate if the state adopts a market-share cap.
The rationale behind such a cap is to foster competition and support newer electric vehicle companies entering the market. However, this would be horrible news for Musk and Tesla as it would give their competitors an advantage.
Needless to say, he was not happy about it.
“Even though Tesla is the only company who manufactures their EVs in California! This is insane,” Musk said in a post on X, the social media website that was formerly known as Twitter.
Clearly, this is bad news for Musk and Tesla.
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