California will not backfill a $7,500 federal tax credit for buyers of electric vehicles that is set to expire this month, Gov. Gavin Newsom said on Friday, reversing an earlier pledge to restart the state’s own EV subsidies.
“We can’t make up for federal vandalism of those tax credits,” Newsom said during a press conference in San Francisco. The state will support expanding EV infrastructure, but “not the direct subsidies that we cannot make up for,” the Democrat said.
President Donald Trump campaigned on rolling back many of former President Joe Biden’s EV-friendly policies. Congress followed through in the major tax-and-spending bill, which placed a Sept. 30 expiration on the tax credit, ending years of federal support for EV buyers.
Newsom’s declaration all but dashes near-term hope among EV makers such as Rivian Automotive Inc., Hyundai Motor Co. and Volkswagen AG that the country’s largest auto market would fill that void. Those automakers and others had urged the governor and state leaders to create a $5,000 EV incentive.
Newsom last year vowed that California would step in if the Trump administration followed through with campaign threats to eliminate the federal $7,500 EV tax credit. But the governor’s plan hit difficulties as California faced a budget deficit.
Newsom on Friday also took aim at Detroit’s mainstream automakers, saying General Motors Co. and Mary Barra, its chief executive officer, “sold us out.”
Newsom’s comments on Barra come after Congress voted earlier this year to block California’s ban on the sale of new gasoline-powered vehicles set to take effect in 2035.
The governor argued that GM led the effort to stop that rule, which the state said in 2020 would have cut greenhouse gas emissions by more than 35%.
GM declined to comment.
The governor’s office said California could still revive an EV credit some time next year, as state leaders look to allocate hundreds of millions of dollars from a carbon-trading program that boosts environmental programs.
California’s previous EV tax credit program ended in 2023, leaving it currently outside of a group of 17 states that currently offer some form of EV purchase tax credit, according to an August report from the nonprofit Tax Foundation.
Still, California accounted for about 27% of all EV sales in the country, according to the Alliance for Automotive Innovation, which lobbies for most major automakers. That market heft positioned the state as the best alternative for EV incentives.
Renewing the incentive also has support from the California Air Resources Board, which joined five other state agencies in August to recommend that the state backfill the $7,500 federal tax credit for EVs with whatever resources are available.
Top photo: Tesla electric vehicles at a recharging station in Albany, California, on Thursday, May 22, 2025.
Topics California
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