California reverses course on EV tax credit revival, will focus on charging instead

"During a San Francisco event on September 19, where he signed six climate-related bills, Newsom outlined the state's pivot, as noted in an Autoblog report. While reiterating California's leadership in clean transportation, Newsom emphasized that cap-and-trade revenues would bolster charging investments rather than consumer incentives. "We can't make up for federal vandalism of those tax credits. There are billions and billions of dollars through 2045 in the cap-and-trade program that continue to make those infrastructure investments, but not the direct subsidies, that we cannot make up for, that were eliminated under the federal program," Newsom stated."

"California accounted for about 27% of all U.S. EV sales in 2024, highlighting the state's central role in adoption, as per data from the Alliance for Automotive Innovation. Industry watchers have warned that without incentives, momentum could slow, though the success of Tesla's vehicles like the Model Y suggests that good EVs could see success even without the federal tax credit."

"Newsom also criticized Detroit automakers, singling out General Motors and CEO Mary Barra for what he described as "selling out" the state by opposing its 2035 ban on new gasoline vehicle sales. That regulation, known as Advanced Clean Cars II, is expected to cut greenhouse gas emissions by more than 35%, according to the California Air Resources Board."

California reversed a pledge to reinstate state EV purchase rebates and will instead allocate cap-and-trade revenues to expand charging infrastructure. The decision responds to the expiration of federal tax credits, with officials saying state funds cannot replace lost federal subsidies. California accounted for roughly 27% of U.S. EV sales in 2024, underscoring the state's significance in EV adoption. Industry observers warn that removing incentives could slow momentum, although strong-selling vehicles like the Tesla Model Y may sustain demand. The state also criticized automakers opposing the 2035 gasoline vehicle sales ban under Advanced Clean Cars II, which targets emissions reductions exceeding 35%.

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