Newsom scraps pledge to replace $7,500 EV credit after Trump ends federal incentive

CALIFORNIA – Governor Gavin Newsom announced September 19 that the state will not replace the $7,500 federal electric vehicle tax credit, reversing a previous promise amid growing fiscal pressures.

The credit is set to expire on September 30.

“We can’t make up for federal vandalism of those tax credits,” said Newsom.

Last November, Newsom publicly committed to restarting California’s Clean Vehicle Rebate Program if the incoming Trump administration eliminated the federal EV tax credit.

In that announcement, he said the state would intervene to provide rebates using California’s Greenhouse Gas Reduction Fund.

That plan now appears sidelined by fiscal constraints.

Credits were to last until 2032

For years, buyers of new electric vehicles in the U.S. could qualify for up to $7,500 in federal tax credits under the Inflation Reduction Act. Qualifying used EVs were eligible for up to $4,000.

These credits made EVs more affordable by lowering the upfront cost for consumers.

However, President Donald Trump’s “One Big Beautiful Bill” ended those credits in an effort to reduce federal spending and shift EV adoption to the private market.

The program was supposed to last another seven years, through 2032.

CARB proposes replacing tax credits

Rather than reinstate the credits, Newsom said the state will direct resources toward expanding charging infrastructure.

He noted that California already has over 200,000 charging stations.

In August, the California Air Resources Board (CARB) suggested exploring new funding, if resources allow, to help low-income consumers and small businesses access zero-emission vehicles.