California Gov. Gavin Newsom said on Monday that the state could create new rebates for zero-emission vehicles if President-elect Donald Trump scraps federal tax credit for electric vehicle (EV) purchases.
Newsom said he would propose creating a new version of the state’s Clean Vehicle Rebate Program if the incoming Trump administration repeals the EV tax credit program rolled out under the Inflation Reduction Act (IRA).
“Consumers continue to prove the skeptics wrong—zero-emission vehicles are here to stay,” the Democratic governor said in a statement.
The previous California rebate program, launched in 2010, had funded more than 594,000 vehicles and saved more than 456 million gallons of fuel until it was phased out last year, according to his office.
Newsom proposed funding the new rebates through the Greenhouse Gas Reduction Fund, established under the state’s cap-and-trade program, which requires polluters to pay for their emissions.
“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,” the governor said.
“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.”
The IRA was signed into law by President Joe Biden in 2022 as part of his administration’s efforts to reduce greenhouse emissions. Under the program, consumers can obtain $7,500 in tax credits for the purchase of new EVs and $4,000 for used EVs.
Trump had previously criticized the Biden administration for its EV policies. In his July address at the Republican National Convention in Milwaukee, Trump said he would “end the electric vehicle mandate on day one” of his administration to save the country’s auto industry “from complete obliteration.”
Karoline Leavitt, a spokeswoman for Trump’s transition team, said on Monday that the president-elect remains committed to fulfilling his campaign promises.
“When he takes office, President Trump will support the auto industry, allowing space for both gas-powered cars AND electric vehicles,” Leavitt said in a statement.
Newsom’s proposed rebates could exclude Tesla and other automakers to promote more market competition and innovation, according to the governor’s office. However, that is subject to negotiation with the state Legislature.
Tesla CEO Elon Musk has criticized the potential exclusion of Tesla from the proposed rebates.
California has surpassed 2 million zero-emission vehicles sold, according to Newsom’s office. The fate of the proposed rebates remains uncertain, as early budget projections indicate that the state could face a $2 billion deficit next year, according to a report released by the nonpartisan Legislative Analyst’s Office last week.
