California Proposes $200M EV Incentives to Counter Federal Policy Rollback

After the U.S. federal electric vehicle (EV) tax credit expired on September 30, 2023, California Governor Gavin Newsom proposed a $200 million state-level EV rebate program to boost the market. Previously, California’s Clean Vehicle Rebate Project had allocated $1.49 billion over a decade, supporting 586,000 new-energy vehicles, but the program ended in 2023. The per-vehicle rebate amount under the new proposal has not yet been determined. The expiration of the federal incentive led to a sharp decline in U.S. EV sales in the fourth quarter of 2023, putting pressure on automakers: Stellantis announced it would discontinue plug-in hybrid Jeep models in North America, while General Motors recorded a $6 billion impairment charge related to its EV operations. Additionally, the Trump administration restricted California’s authority to enforce mandatory EV quotas, eliminated penalties for automakers failing to meet fuel efficiency standards, and allowed automakers to comply with regulations without purchasing carbon credits—further weakening incentives for electric vehicles.