Newsom wants CA consumers to pay to replace $7,500 federal EV credit, Tesla excluded

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California Gov. Gavin Newsom said if President-elect Donald Trump ends the $7,500 electric vehicle rebate program, he’ll get Californians to pay for new credits. However, the credits would not include Tesla, which is the most popular EV company and the only EV manufacturer in the state.

This comes weeks after Newsom and his administration passed new refinery and carbon credit regulations that will add up to $1.15 per gallon of gasoline and require Californians with gasoline-powered cars to earn up to another $1,000 per year in pretax income to afford.

“We will intervene if the Trump Administration eliminates the federal tax credit, doubling down on our commitment to clean air and green jobs in California,” said Newsom in a statement.

Tesla CEO Elon Musk, whose rocket launches were recently blocked by a California regulatory board that cited his personal politics, shared his disapproval on his social media platform, X, after Newsom staff told Bloomberg that Tesla models would not qualify for California rebates.

“Even though Tesla is the only company who manufactures their EVs in California,” said Musk. “This is insane.”

Musk recently moved SpaceX and X out of California, citing a new law signed by Newsom banning parental notification for gender change requests from K-12 students.

The credits would be paid for through California’s cap-and-trade program, which requires carbon emitters to purchase credits from the state — costs which are generally passed on to consumers in the form of more expensive gasoline, energy, and even concrete.

Emitters buy a few billion dollars worth of credits from California each year, with the state’s $135 billion high speed rail project getting the lion’s share of the revenue.

The California Resources Board — all but two of whose voting members are appointed by the governor — recently approved $105 billion in EV charging credits and $8 billion in hydrogen charging credits to be largely paid for by drivers of gas cars and diesel trucks.

An investigation by The Center Square found the change was pushed by EV makers and the builders of EV charging systems. Buyers of EV chargers, who pay for the energy and own the charger, sign installation contracts that permanently give away their rights to government or other EV charging credits generated from fueling a vehicle with electrons instead of gasoline.

These chargers are often bundled with the purchase of an EV, or covered entirely by utility or government rebates, meaning they are permanent, zero-or-low-cost revenue streams for the company collecting the credits.