CALIFORNIA – Governor Gavin Newsom announced November 25, plans to bring back California’s $7,500 Clean Vehicle Rebate Program (CVRP) if the incoming Trump Administration follows through on its threat to eliminate the federal electric vehicle (EV) tax credit.
Newsom’s office told Bloomberg News that the current proposal includes market-share limitations that would exclude Tesla’s popular EV models. The details — including Tesla’s possible omission from the credits — will be negotiated with the state legislature and could change, Newsom’s office said.
Tesla CEO Elon Musk posted to X, formerly known as Twitter, his response.
“Even though Tesla is the only company who manufactures their EVs in California! This is insane,” said Musk.
Even though Tesla is the only company who manufactures their EVs in California!
This is insane. https://t.co/EhVeG2TYqT
— Elon Musk (@elonmusk) November 25, 2024
Tesla sold 104,000 cars to California residents in the first half of 2024. Exclusion from the rebate program may further impact sales which are already down 13% from the same period in 2023.
Trump planning to eliminate federal federal EV tax credit
According to Reuters, President-elect Donald Trump’s transition team is planning to eliminate the $7,500 consumer tax credit for electric-vehicle purchases as part of broader tax-reform legislation.
Musk, who will co-head Trump’s new Department of Government Efficiency (DOGE) previously said in July that killing the subsidy might slightly hurt Tesla sales but would be “devastating” to its U.S. EV competitors, which include legacy automakers such as General Motors.
General Motors, along with Toyota Motor Corp. and Volkswagen urged Trump to retain tax credits for electric vehicle purchases citing unfair competition “from heavily subsidized electric vehicles and technologies exported from China.”
Tesla has already exhausted its credit allocation under previous programs.
Californians purchased 115,897 EVs in the third quarter of 2024
Newsom’s office said in the third quarter of 2024, Californians purchased 115,897 ZEVs, representing 26.4% of all new vehicle sales in the state.
“The proposed California rebates, which would include changes to promote innovation and competition in the ZEV market, could come from the Greenhouse Gas Reduction Fund, which is funded by polluters under the state’s cap-and-trade program,” said the news release.
During its lifetime, the CVRP funded more than 594,000 vehicles.
In addition to rebates, the governor’s office says the state is committed to deploying funds to develop an easy-to-use charging network.
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