On November 26th, Financial Union News (Editor Shi Zhengcheng) As a key focus of the power struggle in the United States over the next four years, California Governor Newsen issued a statement on Monday calling out to Trump: If you cancel the $7500 federal electric vehicle subsidy, California will continue to subsidize it with its own money.

(Source: California Government Website)

Representing a 'wealthy country,' statistical data shows that California's GDP reached $3.8 trillion in 2023. Even when compared on a global scale, the state's economic power is only slightly behind Germany ($4.4 trillion) and Japan ($4.2 trillion), ranking "fifth in the world.

In his statement on Monday, Newsen said: "Consumers continue to prove (climate) skeptics wrong - zero-emission vehicles will continue to exist. If the Trump administration cancels federal tax exemptions, we will intervene and double down on our commitments to California's clean air and green jobs. We will not backtrack on the future of clean transportation - we want to make it more affordable for people to drive non-polluting vehicles."

Newsen also revealed that in the third quarter of 2024, California residents purchased a total of 115,897 'zero-emission vehicles' (ZEV), accounting for 26.4% of total new car sales.

This also marks a milestone where the total number of ZEVs sold in California has exceeded 2 million vehicles, two years after the state just exceeded the 1 million vehicle milestone. In California's definition, 'zero-emission vehicles' include pure electric vehicles, plug-in hybrid vehicles, and hydrogen energy vehicles.

Newsen battles Trump again

Undoubtedly, as widely seen as a potential Democratic presidential candidate, Newsom, with a second contest against Trump, will be a key reference for external judgment. In 2018, Newsom succeeded Jerry Brown as governor in the midterm elections and had a confrontation with Trump on auto emissions.

Because California's air pollution regulations predate federal legislation, the Clean Air Act of 1970 gave California a unique exemption - allowing it to set emissions standards stricter than federal ones, while other states decide which standard to adopt.

However, in 2019, Trump revoked California's ability to set stricter emission standards by establishing the Safe Car Rule. Subsequently, California led the way, along with more than twenty states, to sue the Trump administration. This dispute ended with Biden overturning the relevant regulations after taking office.

It is not difficult to understand that with Trump returning to the White House next January, similar disputes are bound to reoccur.

Newsom has already requested the California legislature to hold a special session in December, with the agenda including increasing litigation funds - suing the Trump administration's budget. During Trump's first term, the federal government was sued by California a total of 120 times.

From a procedural perspective, since the $7,500 subsidy for electric cars is part of the Congressional Deficit Reduction Act, Trump cannot unilaterally cancel it. However, his transition team has stated that the President-elect hopes to repeal these exemptions. Given that electric vehicles have become a symbol of the Biden administration's climate agenda, the Trump team and the Republican Party, which now controls both houses of Congress, have long viewed it as a key target for attack.

According to the Kelly Blue Book report on the American auto industry, the average selling price of new electric cars in the US in October was $56,902, while gasoline cars had an average selling price of $48,623, demonstrating how important the $7,500 subsidy is.

Newsom stated that if Trump cancels this incentive policy, California will restart its tax rebate program for zero-emission vehicles from 2010 to 2023. Official data shows that the program funded 0.594 million vehicles, saving a total of 0.456 billion gallons of gasoline.

In the long term, regardless of changes in subsidy policies, the proportion of electric/clean energy vehicles in California will continue to increase. The current legislation in the state requires all passenger vehicles and light-duty trucks sold by 2035 to be zero-emission vehicles, with half of heavy-duty trucks sold in the same year also being electric vehicles.