Elon Musk Voices Frustration Over Tesla’s Exclusion from California’s EV Rebate Plan

California has proposed a $7,500 state tax rebate for electric vehicle (EV) buyers as a contingency plan if President Trump eliminates the federal EV tax credit.

Governor Gavin Newsom announced this initiative as a way to bolster California’s commitment to clean air and green jobs, especially in light of potential policy changes at the federal level.

The state has long been a leader in zero-emission vehicle adoption, with over 2 million electric, plug-in hybrid, and hydrogen-powered vehicles sold to date.

Previously funded over 594,000 vehicles and saved more than 456 million gallons of fuel

Despite the intended benefits of the program, Tesla may be left out of this new rebate scheme, which has drawn the ire of CEO Elon Musk. Musk expressed his frustration on social media, pointing out that Tesla is the only automaker manufacturing EVs in California.

Although he supports the elimination of the federal tax credit, he opposes Tesla’s exclusion from the state rebates. Tesla moved its headquarters to Texas in 2021, yet it continues to produce vehicles in California.

Governor Newsom indicated that funding for the proposed state rebates could come from the “Greenhouse Gas Reduction Fund,” which is financed by polluters through the state’s cap-and-trade program.

This funding mechanism aims to sustain California’s clean transportation initiatives even if federal support diminishes. Newsom’s plan also requires legislative backing to fully revive the state’s Clean Vehicle Rebate Program, which was phased out in 2023 but had previously funded over 594,000 vehicles and saved more than 456 million gallons of fuel.

If the federal tax credit is indeed eliminated, experts speculate that other states might follow California’s lead by introducing similar rebate programs, although they may not all match the $7,500 rebate. The potential loss of the federal credit could lead to new strategies for incentivizing EV purchases, ultimately influencing future EV sales and production planning for manufacturers.