Newsom: If Trump cuts energy credits, we'll pass our own — and exclude Musk's Tesla

Donald Trump and his right-hand man, tech billionaire Elon Musk, want to abolish federal tax subsidies for electric vehicles. But California Gov. Gavin Newsom is issuing a threat, reported The Daily Beast: if those tax credits go away, California will pass its own— and add a requirement that disqualifies Musk's company.

Musk, who headed up a key super PAC that ran voter outreach for Trump in the 2024 election, has been tapped to head up an unofficial task force alongside far-right businessman Vivek Ramaswamy, known as the Department of Government Efficiency, or DOGE, after an internet meme. The task force's job is to recommend ways to slash government spending and inefficiency and it has pledged to balance the budget, which experts have reservations about.

Tax credits for battery electrification, which Trump himself has vowed to get rid of on the campaign trail in bizarre rants about sharks, would almost certainly be on DOGE's chopping block, although it would require an act of Congress to eliminate them.

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Even though Musk himself runs Tesla, the country's most famous electric vehicle company, he has been in favor of eliminating the subsidies, saying in an earnings call, “It would be devastating for our competitors, and it would hurt Tesla slightly, but long term it probably actually helps Tesla.”

Newsom, however, has other ideas.

“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,” he said in a statement, committing to pass state credits replacing the federal credits if they are eliminated. California is the largest national market for electric vehicles, with 37 percent of the entire nation's registered light-duty electric vehicle fleet located there, which would significantly reduce losses to manufacturers.

The twist, however, is that Newsom has proposed any such state program should have a requirement prohibiting the subsidies from going to any company with excessive market share. He hasn't gone into detail about how this would work, but as Tesla controls 55 percent of the market share for electric vehicles, its line of cars would be virtually guaranteed to be excluded under this requirement, while automakers with a much smaller share of the electric market like Hyundai and BMW would get most of the benefit.

Musk reacted with outrage to the news in a post to his X platform. "Even though Tesla is the only company who manufactures their EVs in California! This is insane," he wrote.