10:47 AM EST, 11/26/2024 (MT Newswires) -- Tesla's (TSLA) possible exclusion from California's electric vehicle rebate program is a political move by Governor Gavin Newsom, Wedbush said in a note Tuesday.

The potential exclusion in the event of President-Elect Donald Trump eliminating federal EV tax credit could intensify tensions between Newsom and Elon Musk, who have clashed before over COVID-19 shutdowns and Tesla moving its headquarters from California to Texas, the investment firm said.

Leaving out Tesla is seen as risky because the company makes most of the electric cars sold in California and is the only EV manufacturer in the state, Wedbush analysts noted.

While the elimination of federal EV tax credits is bad news for the industry, it could benefit Tesla since the company is large enough to thrive without subsidies, according to the note.

Tesla may gain advantages from Trump's policies like higher tariffs on Chinese electric vehicles and a fast-tracked approval process for self-driving cars, which could greatly increase the company's value, Wedbush added.

Wedbush maintained an outperform rating for Tesla with a $400 price target.

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