Tesla and Lawmakers Slam California’s EV Rebate Program for Potentially Excluding Tesla
Gov. Gavin Newsom has urged the reinstatement of the state’s EV rebate program in response to the potential removal of federal incentives by the incoming Trump administration.
California Gov. Gavin Newsom’s recent announcement on Nov. 25 about reintroducing a zero-emission vehicle rebate program and the possibility of excluding Tesla has drawn criticism from CEO Elon Musk and other officials.
Newsom’s announcement emphasized the need to restart the state’s rebate program to reduce the cost of electric vehicle purchases if federal incentives are eliminated by the incoming Trump administration.
The state previously provided up to $7,500 in tax credits for purchasing or leasing new plug-in hybrid electric, battery electric, or hydrogen fuel cell electric vehicles, but the program was phased out in 2023 after supporting almost 600,000 vehicles, as per Newsom’s office.
Additionally, Tesla, the only major electric vehicle manufacturer in the state with the highest market share of nearly 55%, may be excluded from the new rebate program to promote market competition, requiring the state Legislature to establish a new program.
Prompt reactions came from officials across the political spectrum regarding the potential exclusion of Tesla from the upcoming program, highlighting the tension between Newsom and Musk that led to Musk’s decision to move his companies to Texas.
U.S. Rep. Ro Khanna, representing Santa Clara and Alameda counties, stressed that the state’s manufacturing sector should not be politicized.
The automaker has over 40,000 employees in the state.
U.S. Rep. Kevin Kiley of Rocklin, California, also criticized the potential exclusion of Tesla from the state’s program.
Rep. Ro Khanna (D-Calif.) speaks in Washington on June 11, 2024. Khanna responded to Gov. Gavin Newsom’s announcement Nov. 25 to create a new electric vehicle rebate program that might exclude Tesla, saying politics should be left out of the state’s manufacturing sector. Allison Bailey/Middle East Images/Middle East Images via AFP
The new state program, as per Newsom’s office, aims to introduce changes that encourage innovation and support emerging companies in the zero-emission market.
Funding for the program is expected to come from California’s Greenhouse Gas Reduction Fund, funded by companies exceeding the state’s emission limits through the cap-and-trade program.
President-elect Donald Trump has suggested halting programs targeting the phase-out of gas cars.
Initially established in 2005 during President Barack Obama’s administration, federal tax credits have increased from $3,400 to $7,500 today, with an extension until 2032.
Travis Gillmore contributed to this report.
