As federal support for electric vehicle (EV) subsidies comes to a halt, California is considering stepping in with its own incentive system to keep buyers motivated to switch to zero-emission vehicles.
For years, federal tax credits helped make EVs more affordable. But with the $7,500 federal EV tax credit subsidy ending next month under the Trump administration, the California Air Resources Board (CARB) is urging state leaders to take action. CARB has historically shaped California’s emissions policies, and now, under Governor Gavin Newsom’s direction, it has recommended filling this gap with state-backed incentives.
The idea, according to CARB, is to “backfill” the federal tax credit with point-of-sale rebates, vouchers, or credits. These would give buyers direct savings when purchasing electric cars rather than waiting for tax season. The board emphasizes that incentives are crucial to making EVs more affordable, supporting infrastructure growth, and maintaining momentum in California’s push for clean transportation.
In its August report to Governor Newsom, CARB stated:
CARB’s report didn’t stop at financial incentives. Additional measures suggested include:
These recommendations were made in response to Governor Newsom’s June 12 executive order to keep California on track with its clean transportation goals.
California has long been a leader in emissions policy, with many states following its example. However, the state’s efforts have clashed with federal policies under the Trump administration, which rolled back emissions standards and even blocked California’s authority to set stricter rules.
CARB points out that five of the ten most polluted U.S. cities are in California, underscoring the urgency of pushing forward with zero-emission strategies. As CARB chair Liane Randolph said:
“As federal agencies move backward, we are moving forward with actions to expand clean and zero-emission vehicle adoption across all vehicle types.”
If California goes ahead with its own program, the incentives could be as high as the former $7,500 federal credit—though the final number may vary. Regardless, CARB confirmed that California is staying committed to its target of 100% zero-emission new vehicle sales by 2035.
Currently, about 1 in 5 new cars sold in California are zero-emission vehicles, with more than 2 million EVs already on the road. With stronger state-backed incentives, this number is expected to grow even faster.
While details are still being worked out, it’s clear that California intends to remain a leading hub for electric vehicle adoption, regardless of federal pushback.
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