With President Donald Trump set to ax a key electric vehicle tax credit next month, California Governor Gavin New
som has yet to advance his highly touted proposal to restart the state’s own EV subsidies, according to people familiar with the discussions.
To provide a safeguard for EV buyers and the industry, Newsom last year pledged to renew a state program that provided up to $7,500 in rebates for zero-emission vehicles if Trump ended a similar fed
eral tax credit. After Trump signed his One Big Beautiful Bill last month, the federal credits are set to expire on Sept. 30.
But Newsom has yet to present a plan to legislative leaders who control California’s finances, according to a person familiar with the discussions. Ins
ide the governor’s office, officials are engaged in early talks about restoring a subsidy, including whether the state can match the federal EV credit dollar-for-dollar or off
er a lower amount, according to another person. The state’s previous subsidy program ended in 2023.
The pledge to restore it, which was one of Newsom’s first major policy responses to Trump winning a seco
nd term in office, has receded from public attention while the governor spars with the president over immigration raids, trade policy and higher-education funding.
The pending expiration of federal rebates sets the stage for a nationwide rush of EV buying before the $7,500 federal c
edit expires. Tesla Inc., which has a significant manufacturing facility and offices in California, and Rivian Automotive Inc. and Lucid Group Inc., which are headquartered in
the state, all noted in recent earnings calls that they’re expecting the third quarter to be their strongest this year.
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Advocates say they’re hoping states across the country will step in to fill the void left by Trump’s elimination of the subsidy. California, the country’s largest car market, is viewed as crucial to that effort.
If nothing is announced about states’ future plans, “you’re likely to see a dip in the fourth quarter,” said Corey Cantor, research director at the Zero Emission Transportation Association, which lobbies for EV-friendly policies.
In a July letter, a coalition of industry advocates, including Rivian and the charging infrastructure company Terrawatt, called on Newsom “to provide a stabilizing counterforce to recent federal shocks” to the zero-emissions industry. The groups want California to reinstate the EV rebates and expand the eligibility to wealthier buyers.
Rivian said it hopes California will have an EV rebate in place to boost sales of its more affordable SUV model slated to be on the market in the first half of 2026, a company spokesperson said.