California Governor Gavin Newsom has announced that the state will step in with its own electric vehicle (EV) rebate program if President-elect Donald Trump eliminates the federal $7,500 EV tax credit. Newsom’s pledge comes amid reports that Trump’s incoming administration plans to repeal the tax credit as part of broader tax reforms, which also aim to roll back environmental regulations enacted during President Joe Biden’s tenure.
The federal EV tax credit, established to incentivize the adoption of clean vehicles, has been instrumental in promoting the purchase of zero-emission vehicles, such as electric, plug-in hybrid, and hydrogen fuel cell cars. Newsom criticized the potential elimination of the credit, framing it as a threat to the state’s climate goals and clean energy progress.
“If the Trump administration kills the EV tax credit, California will not back down. We will double down on our commitment to clean air and clean energy,” Newsom said. He added that California’s actions would ensure that EVs remain affordable for residents and continue to reduce greenhouse gas emissions.
Newsom has proposed reviving California’s Clean Vehicle Rebate Project, which previously offered state-funded rebates ranging from $1,000 to $7,500 to residents purchasing new EVs. The program, which ran from 2010 to 2023, helped over 594,000 Californians purchase eco-friendly vehicles and reduced the consumption of over 456 million gallons of gasoline. The state plans to use its Greenhouse Gas Reduction Fund, which is financed by companies that exceed pollution limits, to fund the program.
The governor’s office suggested that the revived rebate program could include updates to ensure it aligns with California’s ambitious climate goals. These changes may include additional incentives for low-income residents and measures to foster competition among zero-emission vehicle manufacturers. Newsom also highlighted the state’s leadership in clean energy, noting that California accounts for nearly 50% of all EV sales in the U.S.
The conflict between California and the federal government recalls previous disputes during Trump’s first term, particularly over vehicle emissions standards. Newsom made it clear that the state would continue to fight for aggressive climate action, even if it meant opposing federal policies.
Automakers, many of whom have adapted to and benefited from federal EV incentives, have also voiced concerns about the potential repeal of the tax credit. The Alliance for Automotive Innovation, a group representing major car manufacturers, recently urged Trump’s team to preserve the credit, emphasizing its role in fostering innovation and driving consumer adoption of clean vehicles.
Environmental advocates have echoed these concerns, warning that eliminating the credit could slow progress toward reducing greenhouse gas emissions and hinder the growth of the clean transportation sector. They argue that the move would disproportionately impact middle- and lower-income consumers, who rely on subsidies to afford EVs.
Trump’s decision to target the tax credit comes as part of a broader agenda to roll back green energy policies and shift focus toward traditional energy sources. The administration has argued that the tax credit unfairly subsidizes EV manufacturers and skews the market, favoring renewable energy over fossil fuels.
As the debate over the federal EV tax credit continues, California’s potential intervention could serve as a model for other states looking to counteract federal rollbacks on climate initiatives. The battle highlights the ongoing tensions between state and federal governments over environmental policies and the future of clean energy in the United States.
Sources:
- The Verge: California ready to fight Trump on federal EV tax credit
- AP News: Newsom pledges state EV rebates if federal tax credit is cut
- Reuters: Newsom’s plan to revive EV incentives in response to Trump’s policies
