California will step in and provide rebates to eligible residents who buy electric vehicles if President-elect Donald Trump ends the USD 7,500 federal EV tax credit, Gov. Gavin Newsom said Monday.
“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,” Newsom, a Democrat, said in a statement.
Newsom’s proposal comes as California officials gird for an extended battle with the incoming Trump administration over environmental policy, immigration and other issues. As he did during his first term, Trump is expected to try once again to block California’s authority to set auto emissions limits that are stricter than federal standards.
Already, Newsom has called a special session of the California Legislature for December, in part to discuss an increase in funding for litigation. During Trump’s first term, California sued his administration more than 120 times.
Trump cannot unilaterally eliminate the electric vehicle tax credits, which are part of the Inflation Reduction Act of 2022. Congress would have to amend the law or pass a new one to erase the credits. But his transition team has indicated that the president-elect wants the credits gone.
Under the law, consumers can lower the purchase price of an electric, plug-in hybrid or fuel-cell vehicle by up to USD 7,500 for a new vehicle and up to USD 4,000 for a used one. There are some restrictions, including income ceilings, for those who qualify.
The average sale price in October for a new electric car was USD 56,902 compared with USD 48,623 for a gas-powered vehicle, according to Kelley Blue Book.
Electric vehicles became symbolic of President Joe Biden’s climate agenda, and therefore a prime target for Trump and Republicans. The growth of electric vehicles also poses a threat to the oil and gas industry, which donated heavily to Trump’s presidential campaign.
Newsom said that if Trump eliminated the credit, the governor would propose restarting a rebate program that California had for zero-emissions vehicles from 2010 to 2023. The structure of the program changed over time, but began with a USD 5,000 direct-to-consumer rebate for battery electric vehicles that eventually increased to USD 7,500. It helped fund more than 594,000 vehicles and saved more than 456 million gallons of fuel, state officials said.
The governor also cannot act unilaterally; the state Legislature would have to agree to restart the rebate program.
