California is ready to pick a fight with Trump if he kills the federal EV tax credit

During the campaign, Trump vowed to eliminate President Joe Biden’s “EV mandate” on “day one” of his presidency. And now with this transition underway, his advisors have already discussed including a measure to kill the $7,500 tax credit for new EV purchases as part of a broader tax reform package.

If Trump succeeds, Newsom says he’ll step up and revive the state’s recently phased out Clean Vehicle Program, which offered rebates from $1,000 to $7,500 for the purchase or lease of new, eligible zero-emission vehicles, including electric, plug-in hybrid electric, and fuel cell vehicles.

“We will intervene if the Trump Administration eliminates the federal tax credit, doubling down on our commitment to clean air and green jobs in California,” Newsom said in a statement. “We’re not turning back on a clean transportation future — we’re going to make it more affordable for people to drive vehicles that don’t pollute.”

California’s rebate program, which existed from 2010 to 2023, helped residents purchase more than 594,000 vehicle, which the state estimates helped save more than 456 million gallons of gasoline.

If California brings back the rebate program, it would likely include some changes to “promote competition in the [zero-emission vehicle” market,” and would be paid for out of the state’s Greenhouse Gas Reduction Fund, which is funded by companies that emit pollution under the state’s cap-and-trade program.

Newsom is trying to get ahead of what is likely to be a very contentious four years, in terms of the relationship between his state and the federal government. During Trump’s first term, his administration sued to eliminate California’s ability to set its own air standards, established under the Clean Air Act of 1970. Trump tried to revoke that right alongside his attempt to rollback the Obama era tailpipe emissions rules. (He was unsuccessful in the former attempt, but succeeded in the latter — though the emissions rules were later changed again under Biden.)

This time, Newsom is likely to have more support in his corner. Last time, several automakers, including General Motors, sided with Trump in going after California’s pollution standards. But this time, the industry has gotten a taste of life under a more favorable EV policy and now they don’t want to go back. The Alliance for Automotive Innovation, which represents the Big Three automakers as well as foreign companies that sell in the US, recently sent a letter to Trump’s team imploring him to preserve the tax credit.