On November 28th, the Financial Association reported (editor: Ma Lan) that the incoming president of the usa, Trump, threatened to cancel the current electric vehicle tax credits, triggering strong backlash from California's Democratic Governor Newsom. Newsom declared that even if the federal government does not provide subsidies, California will continue to implement this policy.

Meanwhile, Newsom stated that california's electric auto subsidy program will not include leading companies. $Tesla (TSLA.US)$ The reason is to promote more market competition and innovation.

However, quite a few observers pointed out that this is due to the alliance between Trump and Musk, and Newsom's idea to exclude Tesla appears more like a politicized action.

Investment bank Wedbush analyst Dan Ives stated that Newsom's proposal may provoke a power struggle between him and Musk, which is clearly a political maneuver against Musk by Newsom and California, given Musk's significant role in the next White House and his push for the Trump administration to cancel electric vehicle tax subsidies.

He added that this move could also pose risks for California, as Tesla is the only auto manufacturer producing vehicles in California and is also one of the largest corporate employers in the state.

Tensions continue to escalate.

Newsom and Musk have had friction in the past. In 2020, Tesla's Fremont factory was closed due to the COVID-19 pandemic, but at the time Musk and Newsom clashed over whether the factory needed to be closed. This also set the stage for Musk moving Tesla's headquarters from California to Texas and building the Austin Gigafactory.

In July of this year, Musk announced that he would move his companies X and SpaceX from California to Texas. The "last straw" was because Newsom signed a new law prohibiting schools from requiring teachers to inform parents about their children's changes in gender identity.

This sensitive topic directly triggered Musk's dissatisfaction with democratic liberalism and influenced his business decisions. Moreover, the California government's insistence on not trying to retain Musk heightened tensions between the two sides.

Ives pointed out that, given that the majority of electric vehicles sold in California are Tesla products, Newsom's actions may be quite risky. If Newsom really excludes Tesla from the state's electric vehicle tax credit policy, people will see Musk moving more jobs from California to Texas.

Musk himself stated in an X post that Newsom's idea of excluding Tesla is quite insane. Trump also criticized Newsom's subsidy idea, emphasizing the high cost of living in California and the many homeless people; under these conditions, the California government still insisted on spending money to subsidize electric vehicle buyers, which is undoubtedly a case of getting the priorities wrong.

Editor / jayden