California governor Gavin Newsom picking a new fight with Tesla Inc (NASDAQ:TSLA) boss Elon Musk could be a risky "Game of Thrones battle", says analyst Dan Ives of Wedbush.
The war of words stems from Donald Trump's wish to end the federal support scheme for EV, with Newsom proposing on Monday that this would likely lead him to reboot the state’s clean vehicle rebate program.
However, a cap would be imposed to foster market competition and to support new market entrants, Newsom’s office said, with Tesla likely to be excluded.
With the pair having clashed before, leading to the electric vehicle company moving its base out of the state into Texas, the corporate headquarters from California, Ives highlighted the potential risks for both sides.
The majority of EVs sold in California are Teslas, though this total fell to 54.5% in the first three quarters of 2024 compared to 63% a year ago, "this would be a risky political move in our view", said Ives, "as ultimately the only EV actually produced in California is Tesla and we could see Musk moving more jobs from Fremont to Austin if Newsom goes ahead and excludes Tesla from these tax credits".
As Musk now has a direct line into the Trump White House, and is expected to be a key player in ending federal tax credits, among a myriad of other things on the federal front, the analyst said the overall negative for the EV industry would be a "potential positive" for Tesla due to its "unmatched" scale and scope in the EV industry.
However, EVs is not the main deal for Tesla, says Ives, a factor that has been noted by other Wall Street number crunchers.
The "golden goose" for Tesla would be the sort of legislation to allow a fast-tracked development of its autonomous and full self-driving strategy, which Ives said he fully expects under Trump.
"We estimate is worth a $1 trillion of valuation alone to the Tesla story over the coming years."
The Game of Thrones battle could be extended, he suggested, seeing Governor Newsom also "trying to head down this path next on the FSD/autonomous front given it’s the path Trump/Musk are heading down".