Teslas likely won’t get California’s new EV tax rebate

By Nick Godt Published November 26, 2024

California seems eager to reassert itself, not only as one of the largest economies in the world, but one where EVs will continue to thrive.

Governor Gavin Newsom has announced California will seek to revive state-tax rebates for electric vehicles should the incoming Trump administration carry out its plans to end the existing $7,500 federal incentive on EVs.

“Consumers continue to prove the skeptics wrong – zero-emission vehicles are here to stay,” Newsom said in a statement. “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.”

The governor’s office added that the state’s EV incentive would likely exclude Tesla, and some other automakers, in order to promote market competition and innovation in the state, according to reports.

Tesla CEO Elon Musk, a close advisor to President-elect Donald Trump, has given his blessings to ending federal incentives for EVs, saying the move would probably be “devastating” to Tesla competitors while only impacting his company slightly.

Musk, tweeting on X, the social media platform he owns, said California’s plan to exclude his company from EV rebates was “insane.”

California, the largest economy in the U.S. and the fifth-largest in the world, recently surpassed the 2 million mark for sales of electric, plug-in hybrid, and hydrogen-powered vehicles sold across the state.

Many analysts predict ending federal incentives would lead sales of EVs to slump in the U.S., with some expecting this would lead to an immediate drop of 27% in demand for EVs. 

The Zero Emission Transportation Association (ZETA), a trade group with members including the likes of Tesla, Waymo, Rivian, and Uber, has also come out in support of keeping federal incentives for both the production and sale of EVs.

The incentives have helped domestic manufacturers of EVs and their components, such as batteries, boost job opportunities across the U.S., including in many Republican-dominated states such as Ohio, Kentucky, Michigan, and Georgia, the group says.