California Governor Develops Plan to ‘Intervene’ If Trump Kills Biden’s EV Tax Credit

Governor Newsom lays the groundwork for California to become a leader among liberal states in response to President-elect Trump’s agenda, saying the Golden State will offer its own electric vehicle subsidy as the federal EV tax credit is abolished.

In one statement On Monday, Mr. Newsom said, “We will act if the Trump administration eliminates the federal tax credit, redoubling our commitment to clean air and green jobs in California.”

“We are not returning to a clean transportation future – we are going to make it more affordable for people to drive vehicles that don’t pollute,” he added.

The governor explained that he would propose reviving California’s Clean Vehicle Rebate Program, which expired in 2023. He said this statewide stimulus “funded more than 594,000 vehicles.” California-based nonprofit news outlet CalMatters reports the program handed out $1.2 billion in EV rebates.

Trump and his transition team do reportedly planning to end the federal EV tax credit. The subsidy was established under the Inflation Reduction Act, meaning it would require congressional action to eliminate it.

The EV credit was established as part of Biden’s green energy push, and it was intended to encourage the purchase or lease of electric vehicles. The incentive applies to fifteen electric vehicle models and six hybrid models. according to to car and driver.

Trump promised during the campaign to end the 46th president’s ‘EV mandate’. As part of that goal, he wants to do that eliminate the EV credit. He also wants to extend the tax cuts passed during his first term, and Reuters notes that the repeal of the EV credit could help pay for the tax cut extension. Republicans are expected to put a tax bill at the top of their agenda items to tackle first, the newspaper notes.

Trump’s plan to abolish credit is supported by Tesla. Representatives from the company, the largest EV manufacturer in America, told According to Reuters, the company supports the decision to terminate the credit.

A portfolio manager at Purpose Investments, which invests in Tesla, Nicholas Mersch, explained told Reuters that ending the subsidy would likely help Tesla maintain its position as the largest EV manufacturer in America.

Other companies such as Ford and GM have not been able to drive down production costs as Telsa has, and they have taken advantage of the tax breaks, which have helped make their electric vehicles more attractive to potential buyers who might otherwise be turned off by their costs.

Kelly Blue book reports the average price of an electric car in October 2024 was $56,902, compared to $48,623 for a gasoline-powered vehicle.

A group of economists from Duke, Stanford, UC Berkeley and the University of Chicago estimated the impact of the end of the EV tax credit. They predicted that the end of the subsidy would lead to a 27 percent drop in electric vehicle sales.

In addition to the EV subsidy, so is Mr. Newsom al taking steps to “Trump-proof” California by giving the state’s attorney general more money to fight the new administration’s policies in federal courts.