California Gov. Newsom promises to make electric car rebates available if Trump ends Fed tax credits

California Governor Gavin Newsom at the US Capitol on November 13, 2024. Tom Williams/CQ Roll Call Inc. via Getty Image

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President-elect Donald Trump has expressed his intention to eliminate what he has dubbed the “EV Mandate” – a $7,500 federal tax credit for people who buy electric vehicles (EVs) in the United States, reported AFP.

If Trump decides to eliminate the electric car rebate, California Gov. Gavin Newsom has pledged to step in and make credits available to eligible citizens who purchase zero-emission vehicles.

“We will intervene if the Trump administration eliminates the federal tax credit, redoubling our commitment to clean air and green jobs in California,” Newsom said in a statement, as reported by The New York Times. “We’re not turning our backs on a clean transportation future, but rather making it more affordable for people to drive vehicles that don’t pollute.”

California officials are preparing for a long battle with the new Republican administration over environmental policy and other issues, including immigration.

Trump is expected to again try to block California’s authority to impose its own emissions standards for cars that are stricter than federal limits.

Newsom has already called a special session of the state Legislature next month to discuss, among other things, increasing funding for litigation. California sued the Trump administration more than 120 times during Trump’s first term.

Trump does not have the option to unilaterally eliminate federal electric vehicle tax rebates because they are part of the Inflation Reduction Act (IRA) of 2022. To eliminate them, Congress would have to pass a new law or amend the IRA. However, Trump’s transition team has indicated that he would like to wipe them out.

The IRA provides a tax refund of $7,500 for an electric, fuel cell or plug-in hybrid vehicle or $4,000 for a used vehicle, with some restrictions such as income limits.

In October, the average price of a new electric vehicle in Kelley Blue Book was $56,902, while a gasoline-powered vehicle sold for $48,623 – a difference of $8,279.

The sales and production growth of electric vehicles poses a threat not only to gasoline-powered cars, but also to the fossil fuel industry itself — a major donor to Trump’s presidential campaign.

If Trump stops the loan, Newsom said he would propose restarting a California rebate program that was in effect from 2010 to 2023. According to state officials, the program helped finance more than 594,000 vehicles and saved more than 450 million gallons of fuel.

“Consumers continue to prove skeptics wrong – zero-emission vehicles are here to stay,” Newsom said, The Associated Press reported.

For California’s rebates to be reinstated, the state Legislature would have to vote for it.

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