California Won’t Replace Expiring $7,500 Federal EV Tax Credit

Core Points - California will not replace the $7,500 federal tax credit for electric vehicle (EV) buyers, as stated by Governor Gavin Newsom, marking a reversal from previous commitments to restart state EV subsidies [1][4] - The expiration of the federal tax credit, which was part of a major tax-and-spending bill, has ended years of federal support for EV buyers, impacting the EV market significantly [2][3] - Major automakers like Rivian, Hyundai, and Volkswagen had hoped for California to introduce a $5,000 EV incentive to fill the gap left by the federal credit [3] Group 1 - Newsom's decision is influenced by California's budget deficit, which complicates the state's ability to provide direct subsidies for EV purchases [4][5] - The governor criticized General Motors for its role in blocking California's ban on gasoline-powered vehicle sales, which was projected to reduce greenhouse gas emissions by over 35% [4][5] - California previously accounted for approximately 27% of all EV sales in the U.S., highlighting its significance in the EV market [6] Group 2 - The California Air Resources Board, along with other state agencies, has expressed support for renewing the EV incentive, suggesting that the state should utilize available resources to backfill the federal tax credit [7] - There is potential for California to revive an EV credit in the future, as state leaders are considering allocating funds from a carbon-trading program to support environmental initiatives [5]