by Key Takeaways
- In the event that the Trump administration terminates the federal EV tax credit, Governor Gavin Newsom wants to revive California’s Clean Vehicle Rebate Program.
- In order to make EVs cheap, rebates may be necessary.
- Elon Musk, the CEO of Tesla, is apparently involved in the Trump transition team’s efforts to terminate federal incentives.
In the event that a second Trump administration eliminates federal EV incentives, California Governor Gavin Newsom says the state may bring up its own dormant refund program.
According to Newsom’s office, that would be the Clean Vehicle Rebate Program, which was phased out in 2023. The revised version, if approved, would include provisions to “promote innovation and competition” and finance refunds through the greenhouse gas reduction fund, which is financed by the state’s cap-and-trade program and polluting companies. It would cover a wider range of vehicles than only pure EVs, such as plug-in hybrids and hydrogen-powered cars.
For the sale of EVs, rebates can be essential. EVs have a high initial cost, mostly due to the high cost of lithium-ion battery packs, but they are frequently less expensive to own over the long run. According to Reuters, US President-Elect Donald Trump’s transition team is considering eliminating a $7,500 federal EV tax credit, which is consistent with Republican policies that support the oil and gas sector.
Elon Musk, the owner of Tesla, might find that co-chairing Trump’s new Department of Government Efficiency contradicts his interests. Federal incentives have helped Tesla’s EV sales by lowering the upfront costs. Musk contends that reducing tax incentives will be “devastating” for the automaker’s US rivals, even though Tesla’s statistics might suffer without federal assistance.
Other environmental effects on California and, consequently, the rest of the world could result from Trump’s triumph. For example, the state wants to outlaw the sale of new gas-powered cars by 2035, but the Trump administration may oppose this and other initiatives. California may be denied the waivers required to establish its own auto emissions rules, which are among the strictest in the nation, by an Environmental Protection Agency under Trump’s leadership. In the past, cities like Los Angeles were notorious for the quantity of pollution produced by automobile traffic.
