Khanna: Excluding Musk, Tesla from California EV credits 'just foolish'

Rep. Ro Khanna (D-Calif.) criticized California for a recent proposal that would cut Tesla out of receiving electric vehicle (EV) credits during a Tuesday appearance on CNBC.

“California having electric vehicle tax credits makes all the sense, but excluding Elon Musk and Tesla for probably political reasons is just foolish,” Khanna said in the clip highlighted by Grabien.

“The reality is, Tesla is the biggest manufacturer of electric vehicles in California,” he added. “The Inflation Reduction Act explicitly got rid of the caps on companies like Tesla so that they could produce more electric vehicles.”

Last month, California Gov. Gavin Newsom (D) announced that he would create a new version of the state’s Clean Vehicle Rebate Program if President-elect Trump eliminates federal tax credits for zero-emission vehicles.

“We’re not turning back on a clean transportation future — we’re going to make it more affordable for people to drive vehicles that don’t pollute,” Newsom said in a statement.

But the governor has neither confirmed nor denied if the proposal excludes Tesla from electric vehicle tax credits, as reported by Bloomberg, due to market-share limitations.

Khanna said the potential decision to bar Tesla would not make sense, citing China’s continued leadership in the electric vehicle industry. 

“And if you're looking just three days ago, The New York Times had a report that China is leading, 1.7 million electric vehicles exporting around the world. We are way behind,” Khanna said.

“We need to be producing more of these electric vehicles in the United States," Khanna said. "So, I don’t think politics should interfere with manufacturing or with an issue of our national competitiveness."

He noted that Fremont, a city in his district, is responsible for manufacturing more than 500,000 electric vehicles. It’s a figure he wants to see surpassed in future years.

According to Musk, who owns the electric vehicle giant, Tesla is the only company who manufactures electric vehicles in California.