California is bringing electric vehicle tax credit back 'despite federal interference'

Just as initially promised, California will be resurrecting the compensation for the federal EV tax credit that expired at the end of the third quarter.

It intended to do so immediately after the current White House administration nixed the $7,500 electric vehicle tax credit at the point of sale prematurely, as President Biden's Inflation Reduction Act had scheduled it to run until 2032.

The program was so popular, however, that the US government was paying out $200 million a month in EV subsidies, putting ICE vehicles at a disadvantage. Besides ending the EV tax credit, the government is targeting the strict California emission mandates in a double whammy for electric vehicles like the Tesla Model Y.

The last California state budget of Governor Newsom is now striking back as it earmarks $200 million for clean vehicle subsidies, which may be a boon for Tesla's flailing sales there. That was the initial intent announced before the tax credit expiration, but Newsom subsequently scoffed at the compensation, saying that California "wouldn’t make up for federal vandalism of those tax credits."

Now, however, the governor has reconsidered his stance, and the influential California Air Resources Board (CARB) said that the state will be pressing ahead with its climate agenda "despite federal interference."

The move is great news for future EV buyers in California but is still subject to approval by state lawmakers, with discussions set to take place before the budget approval's July deadline.

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