On the Dash:
- California Gov. Newsom announced $200 million in state-backed EV incentives, but the per-vehicle incentive amount has not yet been determined.
- U.S. EV sales have fallen sharply since federal tax credits expired, with November 2025 sales down 41% year over year.
- Automakers are scaling back EV investments in response, including Stellantis discontinuing plug-in hybrids and GM taking a $6 billion writedown.
California Governor Gavin Newsom announced on Friday a $200 million proposal for a new state EV tax rebate program. The California Air Resources Board (CARB) has not yet determined the per-vehicle amount the state would offer.
The announcement comes as the U.S. electric vehicle market undergoes a major reset following the Trump administration’s elimination of the $7,500 federal tax credit for new EVs and the $4,000 incentive for used EVs. Both credits expired on Sept. 30, 2025. While the removal of the incentives created a brief pull-forward effect in sales, the momentum quickly faded, and consumer demand stalled.
New EV sales declined 41.2% year over year and 5.2% month over month in November 2025, according to Cox Automotive data. EV market share fell to 5.4%, the lowest since April 2022.
Newsom first pledged in late 2024 to create a new version of the state’s Clean Vehicle Rebate Program, which ended in 2023, if the federal government eliminated EV tax incentives. However, just days before the credits expired, he reversed course, citing budget constraints and a need to prioritize infrastructure over direct subsidies.
Analysts expect EV market conditions to continue to weaken, and the ripple effects are evident as automakers begin to pull back on investments. Stellantis announced on Friday that it will discontinue its plug-in hybrid Jeep Wrangler and Grand Cherokee due to low demand, and GM said it will scale back its EV plans and take a $6 billion write-down.
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