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Ten months back, California’s Governor Gavin Newsom told the world that California cared some much about EVs that if the federal EV subsidies went away, he’d take care of replacing them with state money. Here’s exactly what was posted at the Governor’s website about this:
To ensure the state’s continued progress, Governor Gavin Newsom today announced that if the incoming Trump Administration eliminates a federal ZEV tax credit, he will propose creating a new version of the state’s successful Clean Vehicle Rebate Program, which was phased out in 2023. The proposed California rebates, which would include changes to promote innovation and competition in the ZEV market, could come from the Greenhouse Gas Reduction Fund, which is funded by polluters under the state’s cap-and-trade program.
This written commitment was backed up by the Governor’s own verbal pledge. He said:
Consumers continue to prove the skeptics wrong – zero-emission vehicles are here to stay. 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. We’re not turning back on a clean transportation future — we’re going to make it more affordable for people to drive vehicles that don’t pollute.
Today, Governor Newsom met with reporters and went back on his word. He won’t, and he can’t replace the federal money. When asked by members of the media why the new state budget does not do what he promised, he said on video,
Well, you’re talking about the Biden era tax credit that the Trump administration eliminated. Uh so we can’t make up for federal, um, vandalism of those tax credits, but uh we can continue to make the unprecedented investments in infrastructure, which we’re doing. About a quarter of all new car sales in the state of California are alternative-fueled vehicles.
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Let’s break down the new statement and see what we can learn from Governor Newsom.
He begins in error. Governor Newsom says “…you’re talking about the Biden era tax credit…” Factually, President Trump (Congress actually, with the President’s approval) extended Obama-era EV tax credits during his first term. Every Democrat voted against those EV tax credits, as we detailed in a prior story. So EV tax credits were not from the “Biden era.” Tax credits for electrified vehicles go all the way back to President George W. Bush’s term. The federal tax credits for EVs during Obama and Trump had an expiration of sorts. The corporate welfare was limited to a certain number of vehicles for each manufacturer. Any shopper could use the credits. Biden altered the plan a bit by restricting the shoppers of EVs who could use the credits by income and allowing manufacturers who had used up all of their units to continue to enjoy the corporate welfare in an unlimited way, with certain restrictions on where the vehicles and key components could be made.
Governor Newsom then goes on to say “…we can’t make up for federal um vandalism of those tax credits…” This is the reversal of a promise we allude to in our title. Not only did the Governor promise to do exactly that, but he also told us where the money would come from – California’s Greenhouse Gas Reduction Fund. Why did the Governor say he would do something, specify the means by which he could do it, and then not do it?
Last, but not least, Governor Newsom says, “About a quarter of all new car sales in the state of California are alternative-fueled vehicles.” The Governor is not referring strictly to battery-electric vehicles in his statement. They don’t make up a quarter of sales in California. Rather, he’s rolling in all types of electric vehicles, including ones that did not benefit from the now-repealed federal tax incentives. His point is interesting, though, because it highlights that 28 years after the modern age of EVs began, a supermajority of Californians still choose not to buy an EV. Why would California want to subsidize a type of vehicle that a supermajority opt not to buy? Isn’t California a democracy?
Finally, the Governor’s website said in November of 2024, “We’re going to make it more affordable for people to drive vehicles that don’t pollute.” Has this proven true? No. According to Cox Automotive, the average transaction price (ATP) for new electric vehicles rose to $57,245 in August. By contrast, the new-vehicle ATP overall was $49,077. On average, vehicles with conventional powertrains are less expensive than EVs. EVs are also among the vehicles with the highest and most rapid depreciation.
California is facing unprecedented state budget deficits. When Governor Newsom promised to provide shoppers with EV subsidies in November of 2024, he knew this would be the case. The Governor went ahead and pretended that he could subsidize the purchase of EVs using money he specifically pointed to as the source of the subsidies. Why isn’t he keeping his word?
John Goreham is the Vice President of the New England Motor Press Association and an expert vehicle tester. John completed an engineering program with a focus on electric vehicles, followed by two decades of work in high-tech, biopharma, and the automotive supply chain before becoming a news contributor. He is a member of the Society of Automotive Engineers (SAE int). In addition to his eleven years of work at Torque News, John has published thousands of articles and reviews at American news outlets. He is known for offering unfiltered opinions on vehicle topics. You can connect with John on LinkedIn and follow his work on his personal X channel or on our X channel. Please note that stories carrying John’s by-line are never AI-generated, but he does employ grammar and punctuation software when proofreading and he also uses image generation tools.
Image of Tesla Powerwall courtesy of Tesla, Inc.
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Source: torquenews.com
