California Governor Gavin Newsom is proposing US$200 million in new state electric-vehicle tax rebates after Congress earlier this year ended a federal US$7,500 state tax deduction on new EVs, the state said on Friday.
In late 2024, Newsom said if President Donald Trump eliminated a federal EV tax credit, he would propose creating a new version of the state’s Clean Vehicle Rebate Program that ended in 2023 and spent US$1.49 billion to subsidize 586,000 vehicles over a decade. EV sales fell sharply in the final three months of 2024 after the federal tax credit expired on September 30, according to a report by Reuters.
The legislation ending the US$7,500 new federal EV tax credit also ended a $4,000 used EV credit.
On Friday, the California Air Resources Board said it was not yet clear how much per vehicle the state may offer in tax rebates.
Automakers are grappling with the fallout of fewer EV sales.
Chrysler-parent Stellantis said on Friday it will stop selling its plug‑in hybrid electric Jeep Wrangler and Grand Cherokee in North America, while General Motors GM.N, opens new tab said Thursday it would take a US$6 billion charge to unwind some electric-vehicle investments.
The federal government, effective October 1, barred states from allowing electric vehicles and other clean cars to use carpool lanes without meeting vehicle occupancy requirements.
