Tesla shares closed down 4% to $338.59 and fell one other 1.2% in after-hours buying and selling.
Trump’s transition group is contemplating eliminating the federal tax credit score of $7,500 for EV purchases, Reuters reported this month.
Tesla CEO Elon Musk, an in depth Trump adviser, sharply criticized the concept of barring the automaker from EV subsidies writing on X in response “Though Tesla is the one firm who manufactures their EVs in California! That is insane.”
Musk has mentioned he helps ending subsidies for EVs, oil and gasoline.
Newsom mentioned on Monday that if Trump eliminates a federal EV tax credit score, he’ll suggest creating a brand new model of the state’s Clear Automobile Rebate Program that resulted in 2023 and spent $1.49 billion to subsidize greater than 594,000 autos.
“The governor’s proposal for ZEV rebates, and any potential market cap, is topic to negotiation with the legislature. Any potential market cap could be supposed to foster market competitors, innovation and to help new market entrants,” his workplace mentioned. The state faces monetary headwinds. California faces a $2 billion funds deficit subsequent 12 months, a non-partisan legislative estimate mentioned final week.
EVs account for 22% of California gross sales – or 293,000 by way of September 30 – and it’s unclear how a lot the state program would price and if it could embody the federal $4,000 tax credit score for used EVs and impose the identical limits on revenue and automobile value.
California supplied as much as $7,500 for the acquisition or lease of a brand new plug-in hybrid, battery or gas cell EV and will probably be paid for by the Greenhouse Gasoline Discount Fund which is funded by polluters beneath the state’s cap-and-trade program.
Musk and Newsom have clashed over state insurance policies similar to shutting Tesla’s Fremont manufacturing facility through the pandemic and California’s approval of a invoice on transgender children.
In 2021, Tesla moved its headquarters from California to Texas, and Musk mentioned this 12 months that his different corporations similar to SpaceX and social media platform X will comply with go well with.
California has crossed the two million mark for gross sales of zero-emission autos, doubling complete gross sales since 2022.
Final month, a California official mentioned he expects the Environmental Safety Company to approve the state’s plan to halt the sale of gasoline-only autos by 2035, a proposal that main automakers have met with scepticism.
California’s guidelines, which have been adopted by a dozen different states, require 80% of all new autos offered within the state to be electrical by 2035 and not more than 20% plug-in hybrid electrical.