California Governor Newsom to propose clean vehicle rebate if Trump cuts EV tax credit

California Governor Gavin Newsom will propose a new version of the state's discontinued Clean Vehicle Rebate Project if the incoming Donald Trump administration scraps the federal tax credit for electric-vehicle purchases, his office said on Monday.

Trump's transition team is considering the elimination of the federal tax credit of $7,500 for EV purchases, in line with broader tax reform legislation, Reuters reported earlier this month.

California has crossed the 2 million mark for sales of zero-emission vehicles, doubling since 2022.

The CVRP, through which the state of California had provided up to $7,500 for the purchase or lease of a new plug-in hybrid, battery or fuel cell EV, was phased out about a year ago.

The proposed California rebates could potentially be funded by the Greenhouse Gas Reduction Fund, which is funded by polluters, the Governor's office said.

It added the CVRP funded more than 594,000 vehicle purchases during its lifetime. California has the highest number of EV sales in the country.

Last month, a California official said he expects the Environmental Protection Agency to approve the state's plan to halt the sale of gasoline-only vehicles by 2035, a proposal that has been met with skepticism by major automakers.

California's rules, which have been adopted by a dozen other states, require 80% of all new vehicles sold in the state be electric by 2035 and no more than 20% plug-in hybrid electric.