By David Shepardson
WASHINGTON, Feb 2 (Reuters) – California’s proposed $200 million electric vehicle incentive program will be limited to first-time buyers and require participating manufacturers to contribute matching incentives, the administration of California Governor Gavin Newsom said on Monday.
The proposal would allow incentives to defray the upfront purchase costs for new or used EVs but the incentive amounts have not yet been announced. Eligible vehicles will face price caps adopted by Congress in 2022.
The move comes after Congress last year ended a federal $7,500 state tax deduction on new EVs and $4,000 used EV tax credit effective September 30. EV sales fell sharply in the final three months of 2024.
In late 2024, Newsom said if President Donald Trump eliminated a federal EV tax credit, he would propose creating a new version of the state’s Clean Vehicle Rebate Program that ended in 2023 and spent $1.49 billion to subsidize 586,000 vehicles over a decade.
Newsom, a vocal Trump foe who is seen as a leading Democratic presidential candidate in 2028, in September harshly criticized GM, saying GM CEO Mary Barra “sold us out” in a bid to eliminate the progress made by the California Air Resources Board.
CARB met last week in Detroit with the Detroit Three automakers to talk about the plans.
Automakers are grappling with the fallout of fewer EV sales. Chrysler-parent Stellantis said this week it would stop selling its plug-in hybrid electric Jeep Wrangler and Grand Cherokee in North America, while GM said it would take a $6 billion charge to unwind some electric vehicle investments.
Trump has taken aim at EVs on a number of fronts, including signing legislation in June to bar California’s electric vehicle sales mandates. In July, the administration told automakers a new law signed by Trump will not require them to pay any fines for failures to meet fuel-efficiency rules dating back to 2022.
The administration is making other changes that will save automakers billions of dollars in purchasing credits from Tesla and others to meet prior regulatory requirements. GM said last week the rollback of federal emissions rules is expected to save it up to $750 million.
(Reporting by David Shepardson in Washington; Editing by Aurora Ellis)
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