California is making moves to stay ahead as a leader in the electric vehicle (EV) market. Governor Gavin Newsom has announced plans to bring back state tax rebates for EVs if the federal government ends its $7,500 EV tax credit. The governor emphasized California’s commitment to clean air and green jobs, saying, “Zero-emission vehicles are here to stay.”
However, the proposed state rebate might exclude Tesla and some other automakers. According to reports, this decision is aimed at encouraging competition and innovation within the EV industry.
Tesla CEO Elon Musk, who has been an advisor to President-elect Donald Trump, has voiced his support for ending federal EV tax credits. Musk believes this move would hurt Tesla’s competitors far more than it would impact his own company. Still, he criticized California’s plan to exclude Tesla from state rebates, calling it “insane” in a tweet on X (formerly Twitter).
California recently hit a major milestone, with over 2 million electric, plug-in hybrid, and hydrogen-powered vehicles sold in the state. As the largest economy in the U.S. and the fifth-largest in the world, California continues to lead the way in EV adoption.
Analysts warn that ending federal incentives could lead to a sharp drop in EV sales across the U.S. Some predict demand could fall by as much as 27%. The Zero Emission Transportation Association (ZETA), representing companies like Tesla, Rivian, Waymo, and Uber, supports keeping federal incentives.
ZETA argues these credits have boosted EV production and sales while also creating jobs across the country—including in Republican-led states like Ohio, Michigan, and Georgia.
California’s bold move to revive EV tax rebates while excluding Tesla highlights the state’s commitment to fostering competition and innovation in the electric vehicle market. It’s clear that clean energy and green jobs remain a priority, even amidst uncertainty over federal incentives.
This decision, however, raises questions about its impact on industry leaders like Tesla and whether it will truly drive innovation or create hurdles for established players. It’s a fascinating moment in the evolving EV landscape, where policy decisions and market strategies collide.
