California's initiative to provide electric vehicle tax credits could exclude Tesla, prompting a strong reaction from CEO Elon Musk.
The potential repeal of federal EV tax credits by President-elect Donald Trump has raised concerns over Tesla's sales, as these rebates significantly impact buyer decisions. While analysts believe Tesla's dominant market share may shield it from the federal program's loss, the exclusion from California's incentives presents a new challenge.
Currently, California accounts for 35% of all U.S.-registered electric-only vehicles, with 1.26 million EVs, far surpassing Florida, the next closest state.
Tesla's shares fell 4% on Monday, although they have increased over 30% since Election Day, reflecting investor optimism regarding Musk's influence with Trump. UBS analyst Joseph Spak noted that the stock's rise is largely speculative rather than based on fundamental changes.
Musk has had a contentious relationship with California, relocating Tesla's headquarters to Texas in 2021. He is known for his substantial financial support for Trump's campaign and has been a key advisor on various issues.
Musk's net worth is estimated at $330.7 billion, making him the wealthiest individual globally.