by Key Points of the Situation
Governor Newsom’s Position
No state buys more electric vehicles than California, but now some drivers might think twice after Governor Gavin Newsom confirmed he will not offer financial incentives to replace the soon-to-disappear tax credit program.
President Trump’s decision to cancel the $7,500 tax credit for electric vehicle purchases, introduced by the previous Biden administration, means the nationwide subsidies will cease at the end of this month. Some Californians, clean air activists, and several automakers had hoped Newsom would intervene to offer state aid to replace the federal incentives, something he himself had previously promised. But last week he told reporters it is unaffordable.
Lack of Support from Sacramento
We cannot compensate for the federal vandalism of these tax credits [by the Trump administration]
Newsom said at a press conference when asked what he plans to do about the expiring credits.
But we can continue to make unprecedented investments in infrastructure
He continued, emphasizing that the state now has over 200,000 public charging devices compared to only 120,000 gasoline nozzles.
Newsom claimed in 2024 that he would intervene to replace the federal electric vehicle assistance if it were ever canceled, but fulfilling that promise has proven impossible due to California’s growing budget deficit. An earlier state subsidy program ended there in 2023, although after Newsom’s recent speech, his office indicated it could be reinstated next year, potentially using money from California’s carbon emissions trading scheme.
The Broader Fight for Clean Air
Besides criticizing Trump’s work to sabotage California’s nearly 60-year fight to clean up vehicle pollution, Newsom criticized GM and other automakers. He accused them of complicity in an attempt to block California’s ban on the sale of new gasoline-powered cars, which is set to take effect in 2035.
GM sold us out, Mary Barra sold us out
He said, linking the incentive dispute to the larger battle over California’s right to set environmental standards.
Meanwhile, electric vehicle sales have intensified in recent weeks as automakers and buyers rush to take advantage of the closing tax credit window. Hyundai recorded a 72 percent increase in US electric vehicle sales last month compared to August 2024.
This situation demonstrates the complex interaction between federal and regional policies, where environmental initiatives collide with economic realities. The rapid growth of charging infrastructure in California could become a decisive factor for the further adoption of electric vehicles, even without financial incentives. Recent sales data suggests that short-term factors, such as the expiration of credits, can significantly influence market dynamics, but long-term trends may develop under different scenarios.
