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California Governor Gavin Newsom could exclude Tesla and other automakers from an electric vehicle (EV) rebate program if the incoming Trump administration eliminates federal tax credits for electric vehicle purchases.
Newsom proposed creating a new version of the state's clean vehicle rebate program, which has funded more than 594,000 vehicles and saved more than 456 million gallons of fuel. It will then be phased out in 2023, the governor's office announced in a news release Monday.
“Consumers continue to prove skeptics wrong. Zero-emission vehicles are here to stay,” Newsom said in a statement. “We're not going back on a clean transportation future. We're going to make it more affordable for people to drive non-polluting vehicles.”
The proposed rebate would be funded with money from the state's Greenhouse Gas Reduction Fund, which is funded by polluters under the state's cap-and-trade program, the governor's office said. Officials did not say how much the program would cost or save consumers.
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California Gov. Gavin Newsom on Monday proposed creating a new version of the state's clean vehicle rebate program if the incoming Trump administration eliminates federal tax credits for electric vehicle purchases. (Photo: Justin Sullivan/Getty Images, File/Getty Images)
It would also include changes to encourage innovation and competition in the zero-emission vehicle market, which could potentially exclude automakers like Tesla from rebates.
Tesla CEO Elon Musk, who moved Tesla's headquarters from California to Texas in 2021, responded to the possibility of Tesla's EVs being excluded from the program.
According to the governor's office, Tesla and other automakers may not qualify for the proposed tax credits. (Getty Images, File/Getty Images)
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People who buy or lease Tesla cars account for about 42% of the state's rebates, the Associated Press reported, citing data from the California Air Resources Board.
Newsom's office told Fox Business Digital that the proposal is aimed at promoting market competition and that the potential market capitalization would be subject to negotiations with the state Legislature.
| ticker | safety | last | change | change % |
|---|---|---|---|---|
| TSLA | Tesla Inc. | 338.59 | -13.97 |
-3.96% |
“Based on potential market capitalization, Tesla and other automakers may be excluded depending on the cap,” the governor's office said. “But that is also subject to negotiation with Congress.”
Mr. Newsom's office noted that such market capitalization has been part of the rebate program since the George W. Bush administration in 2005.
Mr. Newsom urged Californians to replace gasoline-powered cars with zero-emission vehicles. (Chip Somodevilla/Getty Images/Getty Images)
Currently, the federal tax credit for EVs is worth up to $7,500 for new zero-emission vehicles. President-elect Trump has previously vowed to eliminate the credit.
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California has sold more than 2 million zero-emission vehicles, according to the governor's office. But Reuters reported, citing bipartisan congressional estimates released last week, that the state could face a $2 billion budget deficit next year.
