Responding to recent moves by the Trump administration to hamstring California’s aggressive plans to transition from gasoline-powered cars to zero-emission vehicles, the California Air Resources Board and five other state agencies on Tuesday released what they called a “pathway” to keep the state’s targets on track.
The report listed multiple recommendations for Gov. Gavin Newsom and the Legislature in Sacramento to consider, including backfilling federal tax credits that funded electric vehicle purchases and perhaps bringing back state rebates for EVs, plug-in hybrids and hydrogen fuel cell vehicles.
“Clean air efforts are under siege, putting the health of every American at risk,” Liane Randolph, chair of the California Air Resources Board, said in a media briefing. “California is continuing to fight back and will not give up on cleaner air and better public health — we have a legal and moral obligation.”
But the eight-page report did not estimate how much each or all of the recommendations would cost.
“We don’t have specific numbers,” Randolph said, explaining that “it really depends on how a program would be structured.”
For instance, the massive Capitol Hill budget legislation dubbed the “Big Beautiful Bill” that President Donald Trump signed into law last month included a provision that will eliminate the federal tax credit of up to $7,500 for EVs, effective at the end of September.
“We think that ZEV (zero-emission vehicle) adoption could be supported with that ($7,500) number,” Randolph said, “or even a lower number could continue to support ZEV adoption.”
State agencies recently conducted public input sessions and heard from advocates who proposed a variety of financial incentives — such as proposals that would be limited to medium- and low-income residents, or not having any income limits at all.
In a similar vein, the report raised the possibility of reviving California’s Clean Vehicle Rebate Project that closed in November 2023. The program had offered rebates as high as $7,500 on the purchase or lease of an EV, plug-in hybrid or hydrogen fuel cell vehicle on a first-come, first-serve basis for residents who met income requirements.
“That’s really up to the governor and the Legislature,” Randolph said. “They’re the ones who determine the budget and they’re going to really need to decide whether they’re interested in supporting these additional incentives, how much those additional incentives would be, where the funding source would be.”
Eliminating the tax credit for ZEVs figures to have major implications for California because Gov. Gavin Newsom five years ago issued an executive order that mandates the elimination of sales of all new gasoline-powered passenger vehicles in the state by 2035.
What’s more, Trump recently signed three Congressional Review Act resolutions rescinding those California mandates — as well as rules related to diesel engines.
Newsom responded by filing a lawsuit, arguing that Trump’s actions are unconstitutional and beyond the authority of Congress. Ten other states have joined in the litigation.
“The world is accelerating forward toward cleaner vehicle technologies and is going to watch the U.S. fade into the rearview mirror because this administration is choosing to quit the race,” Randolph said.
But Wayne Winegarden, senior fellow at the Pacific Research Institute, a Pasadena think tank that espouses free-market solutions to policy matters, criticized the report, saying the recommendations would cost billions when California faces chronic annual budget crunches.
“My first thought is that anytime you have a report like that without any dollar figures, hold onto your wallet,” he said. “It’s completely fiscally reckless. We don’t have the resources to make up for the cuts from the federal government, and trying to do so is really going to fiscally destroy the state.”
Some of the report’s other recommendations included:
- Attracting private investment through the state’s Low Carbon Fuel Standard, the program that focuses on reducing the carbon intensity of transportation fuels. The report said more than 200 private companies already participate in the program.
- Accelerating the build-out of charging stations and other EV infrastructure by eliminating delays through strategies such as streamlining permits
- Pursuing efforts to enable the California Independent System Operator — which manages the electric grid for about 80% of the state — to join a regional electricity market with other Western states. Supporters say that would help lower energy costs, thus making a purchase of an electric vehicle more attractive, but opponents say it would link California to coal-burning states such as Wyoming.
In addition, the report calls for finding a way to ensure a longtime incentive stays in place.
Federal authorization that allows California drivers with zero-emissions vehicles to receive decal to place on their cars and drive solo in the car pool, or High Occupancy Vehicle, lanes on the freeway is set to expire at the end of next month.
“Access to HOV lanes is a well-established, non-monetary incentive that is a critical element in purchasing decisions made by consumers in areas of the state with high congestion,” the report said.
California leads all states in the sale of zero-emissions vehicles, with more than 2.3 million, according to the most recent numbers from the California Energy Commission.
The energy commission and the Air Resources Board joined the Governor’s Office of Business and Economic Development (GO-Biz), the California State Transportation Agency and the Department of Consumer Affairs in issuing the report, which came in response to an executive order issued in June by Newsom.