- Reports suggest Trump’s team is pushing to eliminate the $7,500 federal EV tax credit.
- California officially ended its Clean Vehicle Rebate program back in 2023.
- Funding for California’s revised rebate program would come from the Greenhouse Gas Reduction Fund.
California Governor Gavin Newsom has announced that if President-elect Donald Trump moves forward with eliminating the federal EV tax credit, the state will revive its Clean Vehicle Rebate program to keep electric vehicles within reach for local buyers. Surprisingly, Tesla, the state’s dominant EV player, appears to be excluded from the rebates. As expected, this decision has already sparked backlash from Elon Musk.
The Clean Vehicle Program was phased out in 2023, but during its operation, it funded over 594,000 vehicles and saved more than 456 million gallons of fuel. It provided up to $7,500 for ZEV purchases and issued over 66,000 rebates to low-income consumers, totaling more than $354 million. Of the rebates provided, 71% were for BEVs, 26% for PHEVs, and 3% for FCEVs and zero-emission motorcycles.
More: Nearly 1 In 4 New Cars Sold In California Are EVs
“Consumers continue to prove the skeptics wrong – zero-emission vehicles are here to stay,” Newsom said. “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.”
While Newsom did not elaborate on the specifics of the revived rebate program, his office stated it would focus on fostering “innovation and competition” in the ZEV market. The program is expected to be funded by the Greenhouse Gas Reduction Fund, though details remain sparse as negotiations with the state legislature are ongoing.
Tesla Excluded?
One surprising element of the proposed program is Tesla’s exclusion. Speaking with Bloomberg, the governor’s office said that the rebates would include market-share limitations designed to “create market conditions for more of these carmakers to take root.” In other words, Tesla—California’s EV darling—wouldn’t qualify for the incentives, a move that has already drawn ire from Elon Musk.
Watch: California Gov. Gavin Newsom Finds BYD’s 1,197HP YangWang U8 ‘Absolutely Incredible’
Musk quickly took to his social media channel X to criticize the decision, calling it “insane” given that “Tesla is the only company who manufacturers their EVs in California.” The proposal’s final details remain fluid, but the exclusion of Tesla could symbolize a political jab at Musk, who has aligned himself closely with Trump in recent months.
Even though Tesla is the only company who manufactures their EVs in California!
— Elon Musk (@elonmusk) November 25, 2024
This is insane. https://t.co/EhVeG2TYqT
Trump’s plans
California has long been the leading US state in ZEV sales. During the third quarter of 2024, 115,897 ZEVs were sold across the state, representing a 26.4% share of all new vehicles sold.
President-elect Donald Trump has yet to confirm whether he will eliminate the $7,500 federal EV tax credit, though his transition team reportedly favors scrapping the subsidy. In a move many see as strategic, Musk has publicly supported eliminating the credit, having argued previously that it will hurt Tesla’s competition more than Tesla itself.
When asked by Reuters in August about his plans for the EV tax credit, Trump said, “I’m not making any final decisions on it. I’m a big fan of electric cars, but I’m a fan of gasoline-propelled cars, and also hybrids and whatever else happens to come along.”
