Governor Gavin Newsom announced that California will provide rebates for zero-emissions vehicles (ZEVs) if the Trump Administration eliminates the federal tax credit. President-elect Donald Trump has discussed the possibility of eliminating the $7,500 tax credit for electric vehicle (EV) purchases, passed as part of the Inflation Reduction Act in 2022.
Newsom said he would propose the creation of a new version of the state’s Clean Vehicle Rebate Program, which provided a rebate of up to $7,500 to purchase or lease a new plug-in hybrid electric vehicle (PHEV), battery electric vehicle (BEV), or a fuel cell electric vehicle (FCEV). The program provided rebates on more than 594,000 vehicles before it was phased out in 2023. The Greenhouse Gas Reduction Fund, which is funded by the state’s cap-and-trade program, would likely fund the rebates.
“Consumers continue to prove the skeptics wrong – zero-emission vehicles are here to stay,” Newsom said in a statement. “We will intervene if the Trump Administration eliminates the federal tax credit, doubling down on our commitment to clean air and green jobs in California. 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.”
The proposed plan would have market-share limitations that would generally exclude Tesla vehicles due to their dominant market share in California. Tesla CEO Elon Musk responded on X: "Even though Tesla is the only company who manufactures their EVs in California! This is insane."
Newsom is focused on protecting California’s EV policies during the last months of the Biden administration and is lobbying the Biden administration to approve California’s pending waivers to sets its own vehicle emissions standards. Trump has been a consistent critic of California’s EV policies and has stated that he will revoke California’s rules to phase-out the sale of new gasoline-fueled or diesel-fueled passenger cars and trucks by 2035. (see EVs the Focus of Newsom’s Efforts to “Safeguard” California from Trump Administration.)