California Governor Gavin Newsom has proposed a new state-level electric vehicle (EV) rebate program to offset the potential repeal of the $7,500 federal tax credit for EV purchases, a measure that could be enacted by the incoming administration of President-elect Donald Trump. The rebate program, which would revive a previously expired incentive, aims to encourage broader EV adoption among automakers, particularly those with less popular models.
In a statement released on Monday, Newsom’s office explained that the proposed rebate would be contingent on the federal tax credit’s removal. However, the Governor’s office clarified that Tesla, the largest U.S. EV manufacturer, would likely be excluded from the rebate. āItās about creating the market conditions for more of these car makers to take route,ā Newsomās office stated, indicating that the exclusion of Tesla was intended to foster competition from other automakers.
Although most of Tesla’s vehicles currently qualify for the federal tax credit, the exclusion from the California rebate would not apply to the companyās popular models. The move is expected to benefit smaller EV manufacturers, as the state seeks to drive broader adoption of electric vehicles across a more diverse range of automakers.
The terms of the potential rebate remain under negotiation and could change, as officials continue to assess the implications of the federal tax credit repeal. California has long been a leader in EV adoption in the U.S., with sales trends in other states mirroring those in the state. However, it remains uncertain how the removal of the $7,500 federal tax credit would impact national EV sales. Elon Musk, Teslaās CEO, has suggested that the move could actually benefit Tesla, as other automakers are more reliant on the credit for their sales.
Source:Ā Bloomberg