California Will Not Substitute $7,500 EV Tax Credit as Newsom Blames GM for Betrayal | Carscoops

      Governor Gavin Newsom has changed his stance on his earlier commitment to reinstate state electric vehicle (EV) subsidies.

      California's governor stated that the state cannot afford to compensate for the loss of federal tax credits. The program that provides up to $7,500 in credits for EV purchases is set to end this month. This initiative was introduced by President Biden but was canceled by President Trump earlier this year.

      California leads the nation in electric vehicle purchases, yet some drivers may reconsider their options after Governor Newsom announced that he would not provide financial incentives to replace the soon-to-expire tax credit program.

      President Trump's decision to eliminate the previous administration's $7,500 EV tax credits means that federal subsidies will come to an end this month. Many Californians, environmental advocates, and various automakers were hoping Newsom would offer state support to fill the gap left by the federal incentives, a commitment he had made in the past. However, he recently informed reporters that it was not financially feasible.

      No Assistance from Sacramento

      “We cannot compensate for the federal dismantling of those tax credits [by the Trump administration],” Newsom stated during a press conference when questioned about the expiring credits.

      “However, we can continue to make unprecedented investments in infrastructure,” he added, noting that the state currently has over 200,000 public charging stations compared to only 120,000 gas pumps.

      In 2024, Newsom had claimed he would intervene to replace the federal EV support if it was ever eliminated, but fulfilling that promise has become unachievable due to California's increasing budget deficit. An earlier state subsidy program was discontinued in 2023, but following Newsom's latest remarks, his office indicated that it might be reinstated next year, potentially funded by revenues from California’s carbon trading program.

      A Broader Struggle for Clean Air

      In addition to criticizing Trump’s efforts to undermine nearly 60 years of California's automotive pollution cleanup initiatives, Newsom also condemned GM and other automakers. He accused them of complicity in the efforts to block California’s ban on new gasoline-powered vehicle sales, which is scheduled to take effect in 2035.

      “GM sold us out, Mary Barra sold us out,” he remarked, linking the issue of incentives to the broader fight over California's right to establish environmental regulations.

      Meanwhile, electric vehicle sales have surged in recent weeks as automakers and consumers rush to take advantage of the impending expiration of tax credits. Hyundai reported a 72 percent increase in electric vehicle sales in the US last month compared to August 2024.