California Plans $7,500 EV Rebate To Counteract Trump’s Potential Federal EV Tax Credit Elimination
Governor Newsom’s $7,500 State Tax EV Rebate Aims To Offset Potential Federal EV Tax Credit Cuts As ZEVs Surpassed 2 Million Sold
In significant developments in electric vehicle (EV) incentives in the United States (U.S.), California’s Governor Gavin Newsom has announced California’s plan to resurrect its Clean Vehicle Rebate Program.
California Revives EV Rebates
In a statement, Newsom announced that California plans to offer a $7,500 state tax rebate for EV purchases if the federal tax credit is removed. Trump has repeatedly stated that he would eliminate the $7,500 EV tax credit for new vehicles and the $4,000 credit for used vehicles, which were introduced under the Biden administration’s Inflation Reduction Act. In response, Newsom’s plan aims to ensure continued support for EV adoption in the state.
California’s EV Milestone Reached
The proposed initiative comes as California reaches a substantial milestone, surpassing 2 million zero-emission vehicles (ZEVs) sold. Currently, EVs represent 26.4% of new vehicle sales in the state, with 115,897 ZEVs purchased in Q3 of 2024 alone.
The state has already invested heavily in EV infrastructure, installing 150,000 public or shared private EV chargers and over 500,000 at-home chargers. Additionally, California has been awarded over $32 million in federal funds to install direct-current fast chargers along interstates and highways, with another $81.7 million in federal funding approved for next year.
Newsom emphasized the state’s commitment to clean transportation, stating, “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.”
Funding Through Cap-and-Trade
The rebate program would be funded through the Greenhouse Gas Reduction Fund, supported by the state’s cap-and-trade program. Historically, California’s previous Clean Vehicle Rebate Program, which ran from 2010 to 2023, funded more than 594,000 vehicles and saved over 456 million gallons of fuel.
The proposal requires state legislature approval and comes with a broader strategy to ensure California remains a leader in ZEV adoption, including a mandate that all new vehicles and light trucks sold in the state must be ZEVs by 2035.
By potentially bridging the gap left by a possible federal tax credit elimination, the proposed rebate program not only protects potential buyers but also reinforces California’s leadership in the electric mobility, signaling to automakers and consumers that the transition to EVs is more than a passing trend.
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