Tesla faces "backstabbing" at home and may be excluded from California's new electric vehicle tax credits

According to the Zhitong Finance APP, the office of California Governor Gavin Newsom stated on Monday that if elected President, Trump cancels the federal tax credit for electric vehicle purchases, Tesla's (TSLA.US) electric vehicles may not qualify for California's new state tax credit proposal. Trump's transition team is considering eliminating the $7,500 federal tax credit for electric vehicle purchases.

Tesla CEO Elon Musk wrote on X: "It's crazy that Tesla is the only company producing electric vehicles in California!"

Musk has previously stated that he supports ending subsidies for electric vehicles, oil, and natural gas.

Newsom stated on Monday that if Trump cancels the federal electric vehicle tax credit, he will propose creating a new version of the state clean vehicle rebate program, which is set to end in 2023 and cost $1.49 billion to subsidize over 594,000 vehicles.

"The governor's proposal regarding ZEV subsidies, as well as any potential market caps, will need to be negotiated with the legislature. Any potential market value will aim to promote market competition, innovation, and support new market entrants," his office stated.

The state is facing financial resistance. Last week, a nonpartisan legislative body estimated that California will face a $2 billion budget deficit next year.

As of September 30, electric vehicles accounted for 22% of California's auto sales, totaling 293,000 units. It is currently unclear how much California's plan will cost or whether it includes the federal government's $4,000 tax credit for used electric vehicles, and whether it will impose the same restrictions on income and vehicle prices.

California offers subsidies of up to $7,500 for the purchase or lease of a new plug-in hybrid, battery, or fuel cell electric vehicle, which may be funded by the greenhouse gas reduction fund, financed by polluters under the state's cap-and-trade program.

Musk and Newsom have clashed over state policies, such as the closure of Tesla's factory in Fremont during the pandemic and California's approval of a bill regarding transgender children.

In 2021, Tesla moved its headquarters from California to Texas, and Musk stated this year that his other companies, such as SpaceX and the social media platform X, would follow suit.

California's zero-emission vehicle sales have surpassed 2 million, doubling total sales since 2022.

Last month, a California official said he expects the Environmental Protection Agency to approve the state's plan to stop selling pure gasoline cars by 2035, a proposal that has been questioned by major automakers.

California's regulations have been adopted by over a dozen other states, requiring that by 2035, 80% of all new cars sold in the state be electric vehicles, with plug-in hybrids not exceeding 20%