California Gov. Gavin Newsom unveiled plans for a state rebate program to support EV buyers, but Tesla, the nation’s largest EV manufacturer, would be excluded. The initiative comes as a response to concerns that President-elect Donald Trump may repeal the $7,500 federal EV tax credit.
Newsom’s proposal aims to revive a previously expired state rebate program, fostering broader EV adoption among automakers with less popular models. “It’s about creating the market conditions for more of these car makers to take root,” a spokesperson for Newsom’s office said.
The decision to exclude Tesla is expected to fuel further tensions between Newsom and Tesla CEO Elon Musk. Their relationship has been strained since Musk criticized California’s COVID-19 restrictions, which included temporary closures of Tesla’s Fremont factory.
Tesla, whose engineering headquarters remains in Palo Alto despite relocating its corporate headquarters to Austin, TX, in 2021, would likely feel the impact of this exclusion. However, Musk has publicly stated that repealing the federal tax credit could ultimately benefit Tesla, as other automakers depend more heavily on these incentives to drive sales.
California has long been a leader in EV adoption, often setting trends mirrored across the U.S. in subsequent years. While the exact terms of the proposed state rebate are still under negotiation, Newsom’s plan signals a bold attempt to reshape the EV market landscape by challenging Tesla’s dominance and encouraging competition.
