Tesla (TSLA.US) faces "backstab" at home and may be excluded from California's new EV tax credit
1min read If President-elect Trump scraps the federal tax credit for buying electric vehicles, Tesla's EVs may not qualify for California's new state tax credit proposal, the governor's office said Monday.
Tesla CEO Elon Musk wrote on X: "Despite Tesla being the only car company manufacturing EVs in California! This is nuts."
Musk has said he supports ending subsidies for EVs, oil and gas.
If Trump scraps the federal EV tax credit, Newsom said Monday he would propose a new version of California's clean car rebate program that would end in 2023 and cost $1.49 billion to subsidize more than 594,000 vehicles.
"The governor's proposal for ZEV rebates, and any potential market caps, would need to be negotiated with the legislature. Any potential caps would be aimed at promoting competition, innovation and supporting new entrants," his office said.
The state is facing fiscal resistance. Last week, a nonpartisan legislative estimate said California would face a $2 billion budget deficit next year.
As of Sept. 30, EVs accounted for 22% of California's auto sales, or 293,000 vehicles. It is unclear how much California's plan would cost, or whether it would include the federal $4,000 tax credit for used EVs and the same income and vehicle price limits.
California offers up to $7,500 in rebates for buying or leasing a new plug-in hybrid, battery or fuel cell EV, which could be paid for by the state's greenhouse gas reduction fund, which is funded by polluters under the state's cap-and-trade program.
Musk and Newsom have clashed on state policy, such as closing Tesla's Fremont factory during the pandemic and California approving a bill on transgender children.
Tesla moved its headquarters from California to Texas in 2021, and Musk said this year that his other companies, such as SpaceX and the social media platform X, would follow suit.
California's ZEV sales have surpassed 2 million, doubling its total since 2022.
Last month, a California official said he expected the EPA to approve the state's plan to stop selling pure gasoline cars by 2035, which has been questioned by major automakers.
California's rules have been adopted by more than a dozen other states, requiring that 80% of all new cars sold in the state be EVs by 2035, with no more than 20% plug-in hybrids.