It was obvious that if Trump were to be re-elected he would move to completely remove any EV tax incentives that exist at the federal level. It was also obvious, at least to this author, that any attempt to do so would get pushback from California. It appears California governor Gavin Newsom is preparing for the eventuality by working on legislation that would have the state increase its incentives if the U.S. government pulls them.
Based on a program that was phased out in 2023, the program would replace the $7,500 federal tax incentive if the Trump Administration decides to pull the funding. This would provide buyers relief at the state level, and push forward the state’s agenda to have clean air to breathe.
Elon Musk, CEO of the world’s largest EV manufacturer, has said that his company doesn’t need the incentives to sell cars, and despises the idea of any incentives. When he’s running the advisory Department of Government Efficiency (DOGE), he’ll likely recommend the eliminiation of tons of systems designed to make things affordable — including electric vehicles.
Perhaps in a petty move that wouldn’t stand up to scrutiny in the California Supreme Court, the proposed incentive will only apply to auto manufacturers below certain market-share percentages. In other words, Tesla buyers wouldn’t be eligible for the incentive.
Newsom’s office tells Bloomberg that the limitation is “about creating the market conditions for more of these car makes to take route.” Also, it stands to reason that if any one automaker grows quickly enough, it’d no longer be eligible for the incentive. Right now, though, the legality of legislation penalizing one company is a bit suspect, but the federal government is planning on banning just TikTok so we do live in wild times.
Elon Musk, who has said he doesn’t need the incentives and moved his businesses out of California because of its woke policies, is big mad at the move.
Of course, pettiness aside, this will likely not hold up in court. Depending on the way the legislation is listed, it also may include other EV manufacturers, who’ll also be not happy by the move. Musk will likely also spend another small fortune to buy another election, ensuring that Gavin Newsom isn’t reelected as governor of California, which the Trump administration has threatened to do to other politicians.
In the meantime, though, it’s becoming clear about how California’s governor is going to handle a Trump 2.0 with Elon Musk at his side.
