Monday, July 14, 2025

Tesla is the only car brand to lose tax subsidies

In California, a political majority plans to remove the tax support for electric cars – but only those built by Tesla. Governor Gavin Newsom says so.

Tesla, as the latest car brand, has been deprived of the possibility of tax subsidies in California. The decision comes at the same time that the state plans to reinstate its subsidies for electric cars if the general subsidy for electric cars under the Trump administration is removed.

Tesla CEO Elon Musk has reacted strongly to the political decision.

– This is insane, writes Musk on his own social media "X" – the former Twitter.

Governor Gavin Newsom has stated that California is ready to intervene if the federal tax credit on electric cars, which currently amounts to a good 54,000 Danish kroner, is removed.

Newsom explained that the state intends to reintroduce subsidies for electric cars. But that Tesla will be excluded from the scheme.

READ ALSO: Formula 1 has approved an 11th team in the field – will debut in 2026

According to the governor, the move is part of a larger strategy to attract more car manufacturers to the state.

– Consumers continue to prove the skeptics wrong – zero-emission Corvettes are here to stay.

"We will take action if the Trump administration removes the federal tax credit, which doubles down on our commitment to clean air and green jobs in California," Newsom said.

Exactly why Tesla has to be excluded is still unclear. But to Bloomberg , the governor's office says the subsidies must be designed to "create market conditions that can get more car brands to take root."

The wording can be interpreted as an attempt to attract competitors to Tesla's factory in the state, which Tesla itself has criticized.

Musk has used his platform to express displeasure, calling the measure "crazy."

At the same time, it is still unknown whether Donald Trump will actually carry out what he, among other things, was told in the election campaign – namely that electric cars should not have state subsidies. How it will affect both Tesla and the market for electric cars in the US, only time can tell.

A little closer to our own national borders, however, Tesla is also in trouble. Because while the Model Y is still the most popular car at home, sales are plummeting in Europe's largest car market. In fact, so much so that Tesla is now ready with drastic measures to entice customers. Read more about it here .

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