$7,500 EV Tax Credit at Risk: California Challenges Trump With New Statewide Rebate Proposal

As President-elect Donald Trump eyes eliminating federal EV tax credits, California Governor Gavin Newsom proposes a $7,500 state rebate to protect clean transportation efforts and keep zero-emissions vehicles affordable for residents.

Tesla's Exclusion Sparks Controversy Over California's $7,500 EV Rebate

Today, Democratic Governor Gavin Newsom of California said that in the event that President Trump were to eliminate the federal EV tax credit, the Golden State will present $7,500 in rebates to citizens who own electric vehicles.

According to Governor Newsom's office, Tesla's electric vehicles would not be eligible for California's new state EV tax rebates in the event that President-elect Trump decides to eliminate the federal EV tax credit, Electrek reports.

However, Tesla's exclusion from the California state EV tax rebate did not sit well with Tesla CEO Elon Musk, who is in favor of removing the federal EV tax credit. In an X/Twitter post, he said:

Musk announced this year that SpaceX and X will follow Tesla's lead and relocate their headquarters from California to Texas in 2021.

Trump’s Plan to End the Federal EV Tax Credit

If elected, Trump has pledged time and time again to do away with the $7,500 new vehicle tax credit and the $4,000 used vehicle tax credit that were established by the Biden administration's Inflation Reduction Act.

The Clean Vehicle Rebate Program was established in 2010 and was scheduled to be phased down in 2023. In response, Newsom has today suggested redesigning the program. The electric vehicle incentive in California went from $5,000 to $7,500.

More than 456 million gallons of fuel were saved and over 594,000 automobiles were subsidized under the Clean Vehicle Rebate Program.

California’s $7,500 EV Rebate and the Greenhouse Gas Reduction Fund

The "Greenhouse Gas Reduction Fund, which is funded by polluters under the state’s cap-and-trade program," according to Newsom's announcement, may be used to pay for the state's electric vehicle tax rebates.

In a statement, Newsom stated:

“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.”

During an appearance today, Newsom is expected to provide further details regarding the rebates, as he did not specify how they would work in his announcement. In order to bring the rebate program back to life, the governor would require the support of the state legislature.

California’s Leadership in Zero-Emission Vehicle Adoption

With over 2 million electric, plug-in hybrid, and hydrogen-powered vehicles sold in the state, California remains the leader in the United States when it comes to zero-emissions vehicle adoption.

Half of all new heavy trucks sold in California must be zero-emissions by 2035, and all new cars and light trucks sold in California must be as well.