California prepares to front up against Trump over EVs, and Musk is not happy

California governor Gavin Newsom is preparing for the second round of a Donald Trump presidency, promising this week that if the Trump administration eliminates the country’s federal zero-emission vehicles (ZEV) tax credit, he will aim to reintroduce the state’s own subsidy program – and has reportedly threatened to exclude Elon Musk’s Tesla from the program.

During his most recent campaign, Trump repeatedly promised to end what he called Joe Biden’s “EV mandate” – a stretch, considering there is no such mandate in effect for the United States as a whole.

However, the Inflation Reduction Act (IRA) – which was passed in 2022 did include a $US7,500 tax credit for the purchase of new electric vehicles (EVs).

Trump spent his campaign spouting a range of lunatic claims against EVs – including that they don’t work in the cold and that they cannot travel long distances. In a speech to supports in New Jersey in May, Trump claimed that “on day one I will immediately terminate Joe Biden’s insane electric vehicle mandate and there will be no ban on gas cars or gas trucks.”

It may be that Trump’s vitriol towards electric vehicles has softened somewhat in recent months, ever since Tesla CEO Musk began committing millions to his re-election campaign and became what Musk describes as “first buddy”.

Musk donated an estimated $US132 million to Trump and other Republicans in the run-up to the 2024 election and was repeatedly brought onstage to speak at Trump rallies through the closing months.

Musk also posted to X, formerly Twitter, which he now owns, in July to “take away the subsidies. It will only help Tesla.”

Reuters reported this month that Trump’s transition team is still intending to kill the EV tax credit – a move it says is still supported by Tesla, presumably because the company thinks it has such an advantage over its competitors that will be enhanced with the removal of the credits.

Three of the country’s largest automakers – Ford, General Motors, and Stellantis – have reportedly been strategizing with other car manufacturers on how to ask Trump not to scrap the EV tax credit, according to the New York Times.

It also reported that a coalition of 42 car companies had sent a letter to Trump in which they requested “stability and predictability in auto-related emissions standards.”

However, it was news this week out of California that generated more headlines, and drama, after governor Gavin Newsom promised to propose a new version of the state’s successful Clean Vehicle Rebate Program, which had been phased out in 2023.

“Consumers continue to prove the sceptics wrong – zero-emission vehicles are here to stay,” said Newsom.

“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,” he said. “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.”

California passed the 1 million EV mark two years ago, and as of the end of the third quarter this year has sold 2.1 million EVs.

And it appears that Newsom’s plan might exclude Tesla vehicles from the new EV subsidy. Quoting a “spokesman for the governor”, the New York Times claims that such a move would be due to the fact that Tesla already has a significant share of the market in California, and that the new subsidy program would be designed to “spur market innovation and competition”.

However, a decision as to how the subsidy program would work, and whether any companies would be excluded, would be “subject to negotiations with the legislature.”

Unsurprisingly, Musk was unimpressed. In another post to X, Musk described the potential exclusion as “insane”, adding that “Tesla is the only company who manufactures their EVs in California!”

Musk’s complaints might, though, carry less weight given his decision to throw in his lot with Trump, and his recent declarations that “we don’t have a global warming problem.”