California Governor Gavin Newsom ignited a firestorm this week, branding Elon Musk as “one of the great disappointments” in America’s electric vehicle journey. In a pointed March 25, 2026, Axios interview, Newsom accused Musk of abandoning EVs for robots and AI, just as China surges ahead with 70% of global market share. This clash revives years of Tesla-California tension, from rebate exclusions to manufacturing spats.
Musk’s Long Tesla Legacy vs. New Horizons
Musk poured 18 intense years into Tesla since 2004—over 60% of his 30-year career—helming it from near-collapse to trillion-dollar heights with hits like Model S and Cybertruck. Tesla remains his most iconic brand, defining him as the EV pioneer who mainstreamed sustainable cars. Yet his wealth now draws just 20-25% from Tesla stock (around $178-200 billion of $850 billion total), dwarfed by SpaceX/xAI at 60-65%. Recent focus splits like this—35% AI/robotics, 30% space, 20% EVs—fuel Newsom’s charge that Musk’s pivot left U.S. EVs vulnerable.
China Outpaces Tesla: Why the Shift Hurts
BYD dethroned Tesla in 2025 sales (2.25M vs. 1.64M units), powered by subsidies, cheap batteries, and scale that Musk once matched but now trails. U.S. EV growth stalled after federal credits vanished under President Trump—a policy Musk backed—while his attention turned to Optimus bots and Starship. Musk himself admitted China’s edge in his original EV vision.
What Musk Could Have Done Differently
To shield U.S. EVs, Musk might have rushed a $30,000 Model 2 by 2025 for everyday buyers, expanded U.S. factories aggressively, and lobbied to keep tax credits linked to domestic production. Building local battery chains—lithium refining, LFP cells—would have sidestepped China reliance and tariffs. Instead, ending Model S/X in 2026 and chasing robotaxis widened the gap, just as Newsom warns.
This feud spotlights a pivotal EV crossroads: Can Tesla reclaim U.S. dominance, or has Musk’s empire-building handed China the wheel? As adoption lags, the race intensifies.
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