Despite Trump’s Threats, California Doubles Down on Electric Vehicles

At this year’s Los Angeles Auto Show, automakers made big bets on zero-emission vehicles. Very big.

Commercial car makers like Kia and Cadillac unveiled three-row, family-friendly electric SUVs to appeal to American tastes for larger cars.

These honking big vehicles don’t need engines or fuel. But they’re debuting at a dicey moment for the industry.

With Donald Trump’s return to the White House in January, advocates in California are concerned about the future of zero-emission vehicles, regardless of size, purpose or environmental impact.

Their fear? Trump will repeal tax credits for purchasing the vehicles, as promised during his campaign.

“It’s quite disappointing, knowing how helpful that tax credit and other incentives have been, especially for those who don’t have a lot of financial means to afford these vehicles,” said Cecelia Sullivan, president emeritus of the North Bay Electric Auto Association (NBEAA).

“This is going to be a real test of the durability of federal policies surrounding EVs,” said policy analyst Ingrid Malmgren, with the advocacy group Plug In America.

The tax credits Trump targeted were originally introduced as part of President Joe Biden’s Inflation Reduction Act, passed in 2022. The bill provides buyers who meet certain criteria with up to $7,500 for new EVs and up to $4,000 for used ones. Starting in 2024, customers were able to opt to transfer the credits directly to eligible dealers instead, for a discount upfront.

There are already more than two million zero-emission vehicles on California’s roads, according to the state’s latest available data. Malmgren said lifting tax credits may make it harder for many drivers to be able to afford an EV in the future.

“People who have a lot of money are still going to be able to buy fancy cars, whether they’re EVs or gas cars,” she added. “But if EVs end up being more expensive because these tax credits are taken away or regulations are removed, then the people who will be most impacted are the people who don’t have as much.”

In response to Trump’s threats to end the credits, Gov. Gavin Newsom announced a plan to restart California’s Clean Vehicle Rebate Program, which ended 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. “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.”

The program provided up to $7,500 for the purchase or lease of a zero-emission vehicle. During its lifetime, the program funded nearly 600,000 vehicles and saved more than 450 million gallons of fuel, according to a state press release.

Newsom’s proposed rebates would come from the state’s Greenhouse Gas Reduction Fund, paid for by polluters under the state’s cap-and-trade program, according to the governor’s statement. That fund pays for clean transportation, sustainable housing and other programs that benefit historically disadvantaged communities in the state.

California’s rebuttal is the latest in the state’s ongoing battle with the incoming administration over environment, abortion access, immigration and other political issues.

State lawmakers convened a special session on Monday to pad the budget of the state’s Department of Justice in preparation. As during his first term, the Trump administration is expected to take aim at California’s authority to set auto emissions stricter than federal standards.

While Trump cannot unilaterally eliminate the electric vehicle tax credits, his transition team views the consumer EV credit as an easy target, believing that eliminating it would get broad consensus in a Republican-controlled Congress, Reuters reported.

Tesla CEO Elon Musk, who emerged as a key player in the upcoming Trump administration, effectively endorsed the credit’s elimination on his social media platform X. As the most popular EV maker on the market, Tesla’s competitors are more reliant upon the credits to support sales.

However, other advocates are not as concerned about the industry’s longevity. Sullivan, of the NBEAA, pointed out that some municipalities, including the Bay Area Air Quality Management District, offer their own grants for income-eligible residents to replace their cars with electric vehicles.

“There are still local programs and opportunities for state governments and lower down to provide incentives,” Sullivan said.

Bruce Tuter, a Supervisor at California’s Air Resources Board, is drawing hope from the momentum of the electric and hydrogen vehicle market, like those unveiled at this month’s L.A. Auto Show.

A lot of Californians are driving electric cars, Tuter told KQED. No matter Trump’s goals, the zero-emission vehicle market may be too big to fail.

“There are a lot of jobs that have been created in producing these vehicles and producing all the parts that go into those vehicles,” Tuter said. “There is a lot of positive economic pressure to continue with these kinds of vehicles.”