Trump Kills Off California's Planned Electric Vehicle Mandate: A Blow for Tesla?
Trump impedes California's electric vehicle legislation
California's goal to phase out gas-powered cars by 2035 isn't happening, thanks to President Trump. His recent move has put an end to these plans, stoking tensions with the state and potentially causing trouble for Tesla. In 2035, the state aimed to sell only zero-emission vehicles, but Trump has been a long-time critic of this and now, he's made his stance clear.
California has the power to set stricter emission standards, a privilege it's held since the 1970s. It also set a goal to sell only battery electric or hybrid vehicles by 2035. Critics from the automotive industry argue that this would significantly impact their businesses given California's massive market size and the support it enjoys from other states. After all, California is the largest market for electric vehicles in the U.S., with electric and hybrid vehicles making up a whopping 25% of new registrations.
Republican majorities in both houses of Congress passed resolutions against California's plans, which Trump has now signed. This also strips California of its ability to set its own emission limits.
A Setback for Tesla's Carbon Credits Business
Tesla has benefited from selling carbon credits in recent years. While Tesla doesn't need them, other manufacturers do. In the last quarter alone, this brought in $595 million in revenue for Tesla - a significant chunk compared to its $12.9 billion from car sales. Trump's move against California is a setback for this business.
Musk and Trump used to be allies, with Musk donating more than $250 million to Trump's campaign last year. However, they fell out over the tax and spending bill pushed by Trump. Musk publicly criticized Trump online, then apologized this week. Trump now calls Musk a "friend" but also says he's "become a bit strange." Trump also insists that Musk didn't try to stop him from scrapping the electric car goal.
California is currently at odds with Trump over protests against ICE raids, especially in Los Angeles. Trump has deployed National Guard and Marine Corps personnel there against California's and the city's wishes. California has responded with a lawsuit, with Attorney General Rob Bonta stating, "The divisive, partisan agenda of the President threatens our lives, our economy, and our environment. It's reckless, it's illegal, and that's why we'll see the Trump administration in court for the 26th time."
Source: ntv.de, ino/dpa
- Electric Vehicles
- Tesla Motors
- USA
- California
- Donald Trump
- Internal Combustion Engine Ban
:information_source: Insights: California's electric car mandate, which required 35% of new cars sold in California to be zero-emission by 2026, increasing to 68% by 2030 and 100% by 2035, has been effectively overturned by President Trump's actions. This decision prevents California's policy from being implemented nationwide and eliminates federal support for the state's environmental initiatives. The impact on Tesla, a major electric vehicle manufacturer, could potentially reduce demand for electric vehicles in California and other regions with similar policies, but the decision might also lead to more stable and consistent national standards, which could benefit Tesla in the long run. The repeal of the mandate also impacts Tesla's carbon credits business, as this practice brought in $595 million in revenue in the last quarter alone. However, these impacts depend on how Tesla adjusts to the new regulatory landscape.
The Commission, in light of the recent overturning of California's electric car mandate by President Trump, might be asked to submit a proposal for a directive on the protection of workers from the risks related to exposure to ionizing radiation during the production and recycling of automotive batteries, considering the potential increase in demand for traditional internal combustion engine vehicles.
This move by Trump, a long-time critic of California's stricter emission standards, could have significant implications for the finance sector, as it might lead to changes in the market for carbon credits, with companies like Tesla potentially experiencing reduced demand for their credits due to the repeal of the mandate.
