Governor Gavin Newsom announced Monday that California might introduce rebates for electric vehicle (EV) purchases if the incoming Trump administration decides to eliminate the federal tax credit for electric car buyers.
Newsom suggested reviving a modified version of the state’s Clean Vehicle Rebate Program. The original program, which concluded in 2023, supported the purchase of 594,000 electric vehicles and saved 456 million gallons of fuel, according to a statement from Newsom’s office.
In a statement, Newsom claimed, “Consumers continue to prove the skeptics wrong – zero-emission vehicles are here to stay”. He then added, “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.”
Newsom’s initiative is part of his broader effort to preserve California’s progressive policies as Republican President-elect Donald Trump prepares for his second term in the White House. He urged the state legislature to convene a special session to strengthen state laws and provide additional funds to the attorney general’s office to defend against potential federal challenges.
However, a looming budget shortfall could complicate California’s resistance efforts. As a matter of fact, preliminary projections from the nonpartisan Legislative Analyst’s Office indicate the state may face a $2 billion deficit next year. While this reflects significant progress compared to last year’s $46.8 billion deficit, the shortfall could still limit the state’s ability to expand new programs or pursue federal legal challenges; also legislative leaders in both chambers have stressed the importance of fiscal prudence in anticipation of potential future deficits.
Karoline Leavitt, a spokeswoman for Trump’s transition team, stated, “When he takes office, President Trump will support the auto industry, allowing space for both gas-powered cars and electric vehicles.”
Trump had initially pledged to eliminate federal tax credits for electric vehicles, which offer up to $7,500 for new zero-emission cars and $4,000 for used ones. However, he later moderated his position after Tesla CEO Elon Musk became a supporter and adviser.
Governor Newsom’s proposed rebates might exclude Tesla and other major automakers to encourage greater market competition and innovation, according to his office. However, this proposal remains open to negotiation with the state Legislature.
As a response, Musk described the potential exclusion of Tesla as “insane” in a post on X. Under California’s previous clean vehicle rebate program, approximately 42% of the rebates were issued to individuals purchasing or leasing Tesla vehicles, according to data from the California Air Resources Board.
