California may offer own EV subsidies – and exclude Tesla

As US President-elect Donald Trump is looking to cut the federal EV tax credit programme, which offered a 7,500-dollar incentive for the purchase of an electric car, California is looking to re-instate its own subsidy programme. At least one carmaker would not benefit from the move.

US carmaker Tesla could be excluded from the California state subsidy, as the proposal included market-share limitations. California Governor Gavin Newsom did not explicitly say whether or not other carmakers would be excluded as well.

Tesla CEO Elon Musk commented on his social media platform, calling the move to exclude his company “insane,” adding that “Tesla is the only company who manufactures their EVs in California!” However, Musk has been in favour of scrapping the federal tax credit, which US President-elect Donald Trump is looking to do. The company believes it is big enough to cope with the cancellation of subsidies, while the competition, which is still ramping up, will likely suffer more damage.

According to the California New Car Dealers Association, Tesla accounted for more than half of electric vehicles sold in California in the third quarter of 2024. The Tesla Model Y was the best-selling model. However, the brand’s registrations dropped by 12.6 per cent YoY.

Officially, the move is “about creating the market conditions for more of these carmakers to take root.” However, it must also be mentioned that Musk and Newsome have butted heads before. Tesla even moved its headquarters from California to Texas in 2021 in response to pandemic safety measures required by the state of California. Again, it remains to be seen if any other carmakers will be on the list of excluded carmakers due to market-share limitations.

The California incentive programme would be a new version of the state’s Clean Vehicle Rebate Programme, which was phased out in 2023. “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,” Newsom said in a statement. The money “could come from the Greenhouse Gas Reduction Fund, which is funded by polluters under the state’s cap-and-trade program,” the statement continued.

California recently surpassed the two million vehicles sold there. The state is pushing ahead on its way to zero-emission transport. According to state rules, which are tougher than those issued by the Environmental Protection Agency (EPA), 35 per cent of new cars sold must be zero-emission by 2026. By 2035, that number will be 100 per cent.

gov.ca.gov, businessinsider.com, latimes.com, cncda.org (registrations, PDF)

1 Comment

about „California may offer own EV subsidies – and exclude Tesla“

William Tahil

27.11.2024 um 11:53

Since the CEO of the Tesla Motor Company supports scrapping the Federal tax credit and moved his HQ and additional manufacturing operations out of California in protest at Californian regulations and his vehicles are so expensive that only the well-off can afford them and he has become a political operator opposed to the ideals of human progress of California his hypocrisy is simply - everything we have come to expect from the individual.