"State Governments to Offer Rebates if IRA Electric Vehicle Subsidies Are Eliminated" ... Democratic Presidential Contender Strikes Back at Trump

California Governor Gavin Newsom
Hints at Reintroducing Up to $7,500 Electric Vehicle Rebate

Gavin Newsom, the next potential Democratic presidential candidate and Governor of California, announced that if President-elect Donald Trump eliminates electric vehicle (EV) subsidy benefits, the state government will provide rebates. This is seen as a preemptive response to the possible reduction of benefits under the Inflation Reduction Act (IRA) in Trump's second term starting January next year, marking the first strike.

On the 25th (local time), Governor Newsom stated that if the Trump administration in its second term abolishes the IRA EV tax credit benefits, California will reinstate the rebate program it had provided for electric and hybrid vehicles until last year. Previously, California offered rebates of up to $7,500 (approximately 10.5 million KRW) for low carbon emission vehicles from 2010 to 2023.

He said, "If the Trump administration abolishes the federal tax credit, we will intervene," adding, "We will push even harder for California's clean air and green jobs commitment."

Currently, President-elect Trump's transition team is considering eliminating the maximum $7,500 subsidy benefit for electric vehicle purchases based on the IRA. Trump himself criticized the IRA as a "Green New Scam" during his candidacy and promised that if he won the election, he would increase fossil fuel production such as crude oil and abolish subsidies for electric vehicles and clean energy. Especially since electric vehicles have been regarded as a symbol of the Biden administration's eco-friendly policies, the EV subsidy benefits under the IRA are expected to be reduced or abolished in Trump's second term.

In this situation, Governor Newsom has begun reviewing countermeasures such as reviving the EV rebate program in preparation for reduced federal support. However, to reinstate this policy, approval from the state legislature is required. He also convened a special session next month to discuss increasing the state government's litigation budget in anticipation of possible lawsuits with the federal government after the start of Trump's second term.

The U.S. economic daily The Wall Street Journal (WSJ) reported, "California's plan for an electric vehicle rebate program is the first strike in a long fight with the Trump administration," adding, "One of the biggest disagreements between Governor Newsom, who has set aggressive goals to address climate change, and the second Trump administration will be environmental policy."

The clash between California, led by a Democratic governor, and the federal government led by a Republican president is expected to continue. The U.S. daily The New York Times (NYT) noted, "Governor Newsom's proposal came as California officials prepare for a long-term battle with the Trump administration over various issues including environment and immigration," and predicted, "As in his first term, President-elect Trump is expected to try to block California's authority to set stricter automobile carbon emission standards than the federal government."