It makes sense for the same reason that Musk reportedly endorsing Trump's plan to kill federal EV subsidies makes sense.

Tesla is profitable enough that Musk believes that Tesla will do fine without subsidies. Not so for most other EV makers--they are still at the stage where they are figuring it out and not yet reaping economies of scale. Musk believes that removal of subsidies will greatly hurt them.

If a state wants to encourage a healthy multi-company competitive EV market it makes sense to design the state subsidy program so that the benefits go toward making that happen which in the case of the current EV market means not subsidizing any company whose EV market share is about the same as that of everyone else combined.

I'm not sure why you're bring downvoted, since Musk is on the record saying exactly this.

https://www.businessinsider.com/why-tesla-elon-musk-supports...

Whether he actually believes this or is just claiming to believe this to placate Trump is another question.