Tesla Inc. may be on the verge of significant workforce changes in California, as the company’s CEO Elon Musk clashes with Governor Gavin Newsom over a proposed electric vehicle consumer rebate program. Dan Ives, analyst at Wedbush Securities, likens the feud to a celebrity boxing match, warning that it could have far-reaching consequences for the state’s economy.
A Brewing Controversy
Governor Newsom’s proposal aims to reinstate the state’s Clean Vehicle Rebate program, but with a twist: Tesla would be excluded to promote market competition. Musk swiftly criticized the proposal, calling it “insane” and suggesting that it could damage California’s economic interests.
A Long-Simmering Feud
The dispute echoes ongoing tensions between Musk and Newsom, including previous conflicts over state jobs and corporate taxation. Ives notes that Tesla is the only EV manufacturer actually made in California, making the proposed rebate program exclusion a significant blow to the company.
Potential Job Migration
The analyst suggests that the proposed rebate program exclusion might accelerate job migrations from Tesla’s Fremont facility to its Texas headquarters. Ives warns that this could significantly impact California’s manufacturing landscape, particularly in the electric vehicle sector.
Market Reaction
Tesla stock closed at $338.23 on Tuesday, down 0.11% for the day. In after-hours trading, the stock rose 0.57. Year-to-date, Tesla’s stock has surged by 36.15%.
Broader Implications
The Newsom-Musk feud highlights the complex relationship between state governments and major corporations. With the potential for federal EV tax credit eliminations on the horizon, California’s decision to exclude Tesla from the rebate program could have far-reaching consequences for the company and the state’s economy as a whole.
Expert Insights
“You had Jake Paul and Tyson, and now you’ve got Newsom and Musk - this is gonna be a battle,” Ives told Bloomberg in an interview. “It’s a political battle, but Tesla is the only EV manufacturer actually made in California.”
Wedbush maintained its Outperform rating on Tesla shares, with a $400.00 price target, despite the brewing controversy. The firm’s commentary highlights the complex relationship between Tesla CEO Elon Musk and Governor Newsom, which has been strained by previous disagreements.