Governor Gavin Newsom reverses course on a previous pledge to re-introduce state EV subsidies
by Chris Chilton
41 minutes ago
- California’s governor says the state can’t afford to replace federal tax credits.
- The program of offering up to $7,500 of credits against an EV ends this month.
- President Biden introduced the scheme, but Pres. Trump cancelled it this year.
No state buys more electric vehicles than California, but some drivers might now think twice after Governor Gavin Newsom confirmed he won’t offer financial incentives to replace the soon-to-disappear tax credits program.
Related: Would You Buy An EV After The Tax Credit Expires?
President Trump’s decision to axe the previous Biden administration’s $7,500 of tax credits against an EV purchase means the nationwide subsidies will cease at the end of this month. Some Californians, clean air campaigners, and several automakers had hoped Newsom would step in to offer state aid to replace the federal incentives, something he himself had previously pledged. But last week, he told reporters it was unaffordable.
No Safety Net from Sacramento
“We can’t make up for the federal vandalism of those tax credits [by the Trump administration],” Newsom said at a press conference when asked what he was planning to do about replacing the expiring credits.
“But we can continue to make the unprecedented investments in infrastructure,” he continued, highlighting that the state now has over 200,000 public chargers compared with only 120,000 gas pump nozzles.
Newsom claimed in 2024 that he would step in to replace the federal EV aid if it was ever eliminated, but following through on that promise has proved impossible due to California’s growing budget deficit. An earlier state subsidy program ended there in 2023, though after Newsom’s latest speech, his office reportedly said it could be reintroduced next year, potentially by using cash generated by California’s carbon-trading scheme.
A Broader Fight Over Clean Air
In addition to railing against Trump’s work to sabotage California’s nearly 60-year fight to clean up automobile pollution, Newsom slammed GM and other automakers. He accused them of being complicit in the push to block California’s ban on the sale of new gasoline-powered vehicles set to take effect in 2035.
“GM sold us out, Mary Barra sold us out,” he said, tying the dispute over incentives to a larger battle about California’s right to set environmental standards.
Meanwhile, EV sales have heated up in recent weeks as automakers and buyers rush to take advantage of the closing tax credit window. Hyundai recorded a 72 percent rise in US sales of electric cars last month compared with August 2024.
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