With Donald Trump set to take over as U.S. President in January, the automotive industry is bracing for a number of potential changes, including the implementation of tariffs on goods imported from other countries, decisions on whether or not Chinese companies will be able to build plants in the U.S., and reports that he plans to kill off the existing $7,500 EV federal tax credit. Now, the state of California has announced that if Trump does indeed ditch the EV tax credit, it plans to create a new version of its now-defunct Clean Vehicle Rebate Program, which was phased out in 2023.
“Consumers continue to prove the skeptics wrong – zero-emission vehicles are here to stay,” said California Governor Gavin Newsom. “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. We’re not turning back on a clean transportation future – we’re going to make it more affordable for people to drive vehicles that don’t pollute.”
According to Newsom, these proposed California rebates would be funded by the state’s Greenhouse Gas Reduction Fund, which itself is funded by “polluters” under its cap-and-trade program. The revived rebate would also include changes designed to promote increased competition and innovation in the zero-emissions vehicle market, too, though what those changes might consist of are unclear at the moment.
For now at least, nothing official has been announced regarding Trump’s reported desire to kill off the federal EV tax credit, though the Ford-backed lobby group Alliance for Automotive Innovation is calling for the incoming President to retain it, citing the potential effects of cheap Chinese rivals, if they make it to American shores. Meanwhile, Ford has no plans to alter its EV strategy regardless, and will continue to offer a diverse lineup of traditional ICE, hybrid, plug-in hybrid, and all-electric powertrain options for customers to choose from.
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