California is preparing to reinstate its electric vehicle (EV) rebate program in response to potential changes in federal tax credits under a new Trump administration, but Tesla vehicles are notably excluded from these incentives. Here’s an overview of the situation, its implications, and the players involved.

Background on Federal EV Tax Credits

Under the Biden administration, the Inflation Reduction Act (IRA) provided significant tax incentives for EV purchases, including subsidies for battery production and critical mineral sourcing in the U.S. These credits, capped at $7,500 per vehicle, have been pivotal in boosting EV sales and infrastructure. However, President-elect Donald Trump has pledged to terminate these credits, labeling them as part of a “green scam” and favoring a rollback of clean energy initiatives​

California’s Response

California, a leader in environmental policy, is preparing to counter federal policy changes by reinstating its state-level EV rebate program. Previously, the California Clean Vehicle Rebate Project provided up to $7,000 per eligible EV but phased out Tesla’s inclusion in 2019 due to the automaker exceeding the sales cap for rebates and achieving market dominance​

Tesla’s Exclusion

Tesla vehicles are excluded from the revised rebate plans due to their high sales volume and the state’s focus on supporting emerging players in the EV market. This exclusion reflects an effort to promote competition and affordability in the industry, aligning with California’s broader goal of ensuring EV accessibility​

Industry Reactions

Automakers and battery manufacturers, including Tesla, Rivian, and Lucid, have joined forces to advocate for maintaining federal tax credits. Industry leaders argue that these incentives are crucial for sustaining innovation and reducing emissions in the transportation sector. Elon Musk, despite his ties to the Trump administration, supports California’s stricter clean fuel standards, highlighting a complex interplay between his political and business interests​

Implications for Consumers

If Trump’s administration eliminates federal tax credits, California’s rebate program could fill part of the gap for many EV buyers, excluding Tesla customers. This change may influence market dynamics, potentially driving consumers toward newer brands and more affordable options.