In a surprising move by Gov. Gavin Newsom, Tesla vehicles have been specifically excluded from a new proposed rebate program for electric vehicle buyers in California.

California's Democrat governor is proposing an electric vehicle rebate plan to go into effect if federal subsidies are revoked, one that would exclude Tesla purchasers from benefitting from the program, as Breitbart reports.

Newsom’s proposal comes as a countermeasure to a potential repeal of federal subsidies under President-elect Donald Trump’s incoming administration.

This initiative aims to offer rebates to electric vehicle buyers but would bar Tesla, purportedly because of its significant market share.

The proposal’s specifics remain under negotiation with the state legislature, aiming to create diverse market opportunities for various car manufacturers.

Tesla, despite being a major player in the market, finds itself on the outside looking in with this new plan.

Elon Musk, Tesla's CEO, responded strongly on social media, labeling the exclusion as "insane" and emphasizing Tesla's substantial contribution to California’s manufacturing sector.

Newsom's Proposal and Its Stated Intent

Newsom’s office has expressed that this exclusion is intended to support a variety of car makers and not let a single company dominate the emerging market.

This stance could resonate with Newsom's left-wing constituents, recalling previous disputes between Newsom and Musk.

These tensions trace back to significant incidents such as the relocation of Tesla’s headquarters to Texas in 2021, spurred by Musk’s dissatisfaction with California’s political and regulatory environment.

Moreover, during the peak of the coronavirus pandemic, Musk openly criticized the state’s decision to shut down Tesla’s Fremont factory, calling the measures "fascist" and a threat to Tesla's operations.

Musk Slams California's Potential Regulatory Measures

The exclusion of Tesla from the proposed rebates could significantly impact the company, particularly as it navigates a period of slow growth in the electric vehicle sector.

Newsom’s approach might reshape the competitive landscape in California, where Tesla has recently seen a decline in its market share.

Over the first three quarters, Tesla's sales in California dropped by 12.6%, whereas overall electric vehicle sales in the state saw a modest increase of one percent during the same period.

These developments occur as more than a dozen states look to California’s lead in auto emissions standards, which could be threatened by the Trump administration's plans to roll back fuel-efficiency requirements and challenge California's authority under the 1970 Clean Air Act.

Future of Electric Vehicle Standards and Tesla’s Role

The exclusion raises concerns about Tesla’s ability to compete fairly in its home state, especially amidst potential federal policy shifts. Tesla vehicles currently benefit from federal credits under President Joe Biden’s Inflation Reduction Act, which could be at risk if Trump's proposed changes go through.

This evolving situation presents a complex challenge for Tesla, emphasizing the need for strategic adjustments to maintain its market presence and influence in the electric vehicle industry.

As negotiations continue and political dynamics unfold, the electric vehicle market in California remains at a pivotal juncture. Stakeholders and observers alike are keenly watching how these policies will shape the future of transportation in the state and the nation.