California Governor Gavin Newsom has announced plans to introduce rebates for electric vehicle (EV) purchases in response to the potential elimination of federal tax credits by the incoming Trump administration.

This initiative comes as California has surpassed 2 million zero-emission vehicles (ZEV) sold, reinforcing its position as a leader in the clean vehicle market.

The proposed Clean Vehicle Rebate Program, which previously operated from 2010 to 2023, provided substantial rebates of up to $7,500 and funded over 594,000 vehicles, resulting in significant fuel savings.

However, the program faced challenges, including long wait times for approvals that often delayed purchases and increased costs for consumers.

The governor's office noted that the specifics of the market-share cap for the rebates are still under negotiation in the state legislature.

Despite the potential for GOP opposition, some lawmakers are concerned about the impact on local EV factories, which could complicate efforts to eliminate the tax credit.

Democratic Congressman Ro Khanna has voiced opposition to the proposal, emphasizing Tesla's significant manufacturing presence in California and warning against politicizing the company.

Khanna's concerns reflect a broader apprehension among industry stakeholders about the implications of excluding Tesla from rebate programs, which could stifle competition.

Investor sentiment remains cautious, with analysts suggesting that Tesla's dominant market position may insulate it from the most severe impacts of federal subsidy changes.

As the state moves forward with these plans, the outcome will likely influence the future landscape of the EV market in California and beyond.

Overall, the proposed changes signal a significant shift in California's approach to incentivizing EV adoption amid evolving federal policies.