Teslas probably won’t get California’s new electric vehicle tax rebate

California appears eager to reassert itself, not only as one of the world’s largest economies, but also one where electric vehicles will continue to thrive.

Gov. Gavin Newsom has announced that California will seek to revive state electric vehicle tax rebates if the new Trump administration moves forward with plans to eliminate the existing $7,500 federal electric vehicle tax incentive.

“Consumers continue to prove skeptics wrong – zero-emission vehicles are here to stay,” Newsom said in a statement. “We will step in if the Trump administration eliminates the federal tax credit, redoubling our commitment to clean air and green jobs in California.”

The governor’s office reportedly added that the state’s electric vehicle incentive would likely exclude Tesla and some other automakers in an effort to promote market competition and innovation in the state.

Tesla CEO Elon Musk, a close adviser to President-elect Donald Trump, has given his blessing to eliminating federal incentives for electric vehicles, saying the move would likely be “devastating” for Tesla’s competitors but would have little impact on his company would.

Musk said in a tweet on X, the social media platform he owns, that California’s plan to exclude his company from electric vehicle rebates was “crazy.”

California, the largest economy in the United States and the fifth largest in the world, recently surpassed the 2 million mark in electric, plug-in hybrid and hydrogen-powered vehicles sold statewide.

Many analysts believe that eliminating federal incentives would lead to a collapse in U.S. electric vehicle sales. Some predict this would result in an immediate 27% drop in demand for electric vehicles.

The Zero Emission Transportation Association (ZETA), a trade group with members including Tesla, Waymo, Rivian and Uber, has also advocated maintaining government incentives for the production and sales of electric vehicles.

The incentives have helped domestic manufacturers of electric vehicles and their components such as batteries increase job opportunities across the U.S., including in many Republican-dominated states such as Ohio, Kentucky, Michigan and Georgia, the group says.