California may increase subsidies for battery-electric vehicles that are sold in the state by $2,000, reports Bloomberg.
The state will hold a hearing on offering a $4,500 subsidy for electric vehicles that are sold in California, according to Bloomberg. The federal government’s current $7,500 tax credit on electric vehicles will start to fall once companies have grown enough to sell a total of 200,000 vehicles each.
Late last year, no automaker reached the 200,000 cap, however, Tesla passed this threshold in July and GM may soon as well, according to Bloomberg. For Tesla, this means the federal tax credit on its models will drop to $3,750 for vehicles sold in the first half of 2019, reports Inside EVs. The credit will then be reduced to just $1,875 for units sold beginning July 2019, and will be eliminated altogether by the end of 2019.
At the end of 2017, congressional negotiators spared the current $7,500 federal tax credit that supported sales of plug-in electric vehicles, which could have been eliminated as part of a $1.5 trillion House tax bill. The credit was initially put in place in 2008 and 2009 for plug-in and converted plug-in electric vehicles.
The higher rebates in California follow President Trump’s argument that only the federal government can regulate tailpipe emission standards or mandate electric-car sales.