California Governor Gavin Newsom has weighed in on his long-running tensions with Tesla CEO Elon Musk, describing the entrepreneur as both “one of the great disappointments” and “one of the great innovators of our time.”
Newsom remarked, “He’s the Edison of our time. It breaks my heart.”
In an interview with Axios, Newsom noted that Elon Musk and Tesla benefited significantly from California’s early support for clean energy initiatives, which helped the company grow into a global leader in the segment.
He now criticizes Tesla‘s recent strategic shift toward autonomous driving technologies, arguing that it Musk is allowing China to gain a stronger foothold in the global EV market.
Supportive Times
“I was one of the first Tesla‘s off the line. I’ve been one of their biggest proponents and supporters,” Newsom stated in the interview.
Even after Musk relocated Tesla‘s headquarters to Austin, Texas in 2021 — a move triggered by bitter disputes over Covid-19 lockdown orders — the two sides found ways to cooperate.
In 2023, Musk announced Tesla‘s global engineering and AI headquarters would return to Palo Alto, with Newsom appearing alongside him for the announcement.
The Governor was “one of the first to buy a Tesla Roadster back in the day,” Musk said in 2023, during the opening of its engineering headquarters in California.
By then, Newsom said he “couldn’t be more proud of California’s commitment to support Tesla over the course of the last few decades, noting he was proud that it is a California company.
Since 2009, Tesla has received billions of dollars in direct and indirect subsidies and market mechanisms from the state.
The state’s zero-emission vehicle mandate, launched in 2010, created the regulatory and financial scaffolding that allowed Tesla to scale — a fact Governor Gavin Newsom has repeatedly underscored, arguing that Musk’s company simply wouldn’t exist without California’s incentive programs.
“It was regulation in California that created the conditions that allowed him to take the risk to become the multi-billionaire, maybe trillionaire that he’s become,” Newsom reaffirmed in the new interview.
Fallout
In November 2024, Newsom proposed a new state-level EV rebate program to replace the federal $7,500 tax credit that Trump had pledged to eliminate.
The proposal was designed as a successor to California’s Clean Vehicle Rebate Program, which ended in 2023 after spending $1.49 billion to subsidize more than 594,000 vehicles.
But it included market-share limitations that could have excluded Tesla.
Musk criticized the idea of barring the automaker from EV subsidies, writing on X, “Even though Tesla is the only company that manufactures their EVs in California! This is insane.”
At the time, Musk supported ending federal EV credits, arguing it would ultimately benefit Tesla by weakening competitors who depended more heavily on the incentives.
That position shifted after he departed his DOGE role in May 2025 and publicly broke with Trump over the president’s tax-and-spending bill.
The legislation terminated the $7,500 consumer tax credit for new EVs after September 30, 2025.
Musk then condemned the bill, warning it would be destructive to the EV industry.
The credit’s elimination produced a predictable whiplash: a surge in EV purchases in the third quarter as buyers rushed to beat the deadline, followed by steep declines once the incentive expired.
Musk acknowledged last July during an earnings call that the company was in a “weird transition period” and warned of potential “rough quarters.”
By the end of 2025, Tesla had lost its global EV sales lead to China’s BYD, delivering 1.64 million vehicles compared to the Chinese giant’s 2.26 million — and marking its second straight year of declining sales.
EV Incentives in California
After Donald Trump’s election late last year, Newsom had promised that California would step in if Trump followed through on his threat to end the $7,500 federal credit.
However — as the anticipated deadline of September 30 approached and given California’s budget deficit — Newsom announced that the state would not revive the program as previously stated.
The Governor stated that California wouldn’t be able to support direct subsidies, while remaining committed to supporting expanding EV infrastructure in the state.
The state of California and the Trump Administration have been fighting legal battles on several topics since the US President was elected.
According to official records, California’s Attorney General Rob Bonta has filed 54 lawsuits against the Trump Administration during the first year of his term — some of them focused on clean energy cuts.
Earlier this month, the United States’ Department of Justice (DOJ) sued California on what it calls an “illegal” EV mandate, after the Trump Administration signed into law a bill prohibiting the state from adopting regulations related to fuel economy last year.
China as a Threat
According to Newsom, Musk is currently allowing Chinese competitors to take on Tesla‘s share of the market.
“But right now, he’s allowing — and I think this is Trump, not just Elon Musk — (…) he’s ceding the EV space to China,” the California Governor stated.
Newsom flagged that China has “70% of the global EV market,” while adding, “It’s about statecraft with them. It’s about supply chains.”
At the same time, the California Governor mentioned Canada opening doors to Chinese EVs, through a recently signed trade deal with Beijing, noting that it will pose a risk to security and to the auto industry.
“They’re flooding the zone all around the globe, including now right on the border into Canada, where they’re going to have 49,000 cars getting that tariff down there,” the Governor said.
To him, “it’s a stack play. It’s a national security play. And I really fear what’s going to happen to American legacy automobile manufacturers.”
His opinions are contrary to those of Lauren Sanchez, Chair of the California Air Resources Board (CARB), who earlier this year described the EV deal between China and Canada as a positive step toward replacing gas-powered cars worldwide.
Shift Towards Autonomy
Newsom blamed it on Elon Musk.
“Elon was the one accelerating that,” he said, referring to the EV segment, and “now he’s put the brakes on his own innovation in that space,” as Tesla “has shifted to robotics, humanoids.”
In January, Tesla announced that they will stop producing the flagship Model S and Model X as they transition their manufacturing lines to Optimus production.
According to Musk, it’s “probably true” that people will forget Tesla ever built cars after the company launches the Optimus V3.
Furthermore, Tesla‘s management has been stating that the only (personal) vehicle lined up for debut is the second generation of its Roadster model.
“I really think long-term, the only vehicles that we’ll make will be autonomous vehicles, with the exception of the next generation Roadster,” Musk said last January.
The model is scheduled to be unveiled in “late April.”
Responding to an X user on Wednesday, who requested that Tesla build a minivan, Musk said that “Something way cooler than a minivan is coming.”
He didn’t specify whether he was talking about an upcoming personal vehicle — with only the Roadster in the plans for now — or about the fully autonomous, purpose-built Robovan, unveiled in late 2024 alongside the Cybercab.
