Tesla Inc. CEO Elon Musk has strongly condemned California’s plans to shut the company’s electric vehicles out of consumer rebates under a new proposal, calling it an “insane” decision.
What’s at Stake
According to reports, California Governor Gavin Newsom outlined a new proposal to offer incentives for EV buyers in California if President-elect Donald Trump gets rid of the current federal $7,500 tax break for EV buyers when he returns to the White House early next year. However, the proposed plan includes “market-share limitations” that would exclude Tesla’s popular EV models from tax credit eligibility.
Musk Responds to the Proposal
Musk took to social media platform X to express his displeasure with the proposal, stating:
“Even though Tesla is the only company who manufactures their EVs in California! This is insane.”
The CEO added that the move would hurt jobs in California and is a clear example of shortsighted decision-making.
Support from US Representative Ro Khanna
US Representative Ro Khanna, who represents California’s 17th congressional district, also weighed in on the issue, warning against the proposal in a social media post.
“Tesla makes over 550,000 vehicles in Fremont in my district & employs over 20,000. Let’s not play politics with keeping manufacturing in California. It would be foolish to exclude Tesla,” Khanna wrote.
Impact on Tesla and the EV Industry
Tesla makes Model 3, Y, S, and X at the Fremont factory in California, which has an installed annual vehicle capacity of over 650,000 units. The factory is a significant contributor to the state’s economy, and Musk has stated that Tesla started manufacturing in California despite higher costs because he lived in the state.
Price Action
Tesla stock fell nearly 4% on Monday to close at $338.59, according to market data. Year-to-date, Tesla stock is up 36.3%.
Conclusion
The proposed ban on Tesla rebates in California has sparked a heated debate, with many questioning the wisdom of such a move. As the situation unfolds, it will be interesting to see how the electric vehicle industry responds to this development.