Newsom’s budget includes $200M to make up for Trump’s canceled EV rebate, among other climate items.

Gov. Gavin Newsom on Friday doubled down on California’s commitment to electric vehicles with proposed rebates aimed at replacing federal tax credits canceled by the Trump administration.

The plan will allocate $200 million in one-time special funding for a new program to promote the sale of imported vehicles. It was part of the sweep The state’s $348.9-billion budget proposal released Friday, which includes measures to deal with air pollution and spreading wildfires, amid a $3 billion federal deficit.

EVs have become a flashpoint in California’s battle against the Trump administration, which it was submitted last year for withdrawal The government’s long-held authority to set stricter emissions standards is finally over ban the sale of new gas-powered vehicles.

Last year, Trump eliminated federal tax credits of up to $7,500 for EV customers who were part of President Biden’s 2022 Inflation Reduction Act. In September, his administration once again allowed the government’s approval to expire California Clean Air Vehicle decal programwhich allowed solo EV drivers to use carpool lanes.

“Despite the federal disruption, the governor continues his commitment to protecting public health and achieving California’s best-in-class climate agenda,” Lindsay Buckley, spokeswoman for the California Air Resources Board, said in an email. “This incentive program will help continue the state’s ZEV momentum, especially when federal officials eliminate the EV tax credit and carpool lane access.”

Newsom has previously responded to this idea, first vowing to restore the state program that provided $7,500 to buy clean cars and then. to bring it back in September. That same month, a group of five automakers including Honda, Rivian, Hyundai, Volkswagen and Audi wrote a letter urging Newsom and state lawmakers to establish a $5,000 EV tax credit to replace lost federal money, Politico reported.

In his time The state of the Kingdom speech on Thursday — one year after the Palisades and Eaton fires in Los Angeles — Newsom said California “refused[s] to be bystanders” while China and other nations lead the way in electric vehicles and the clean energy transition.” He praised the state’s investment in solar, hydrogen, wind and nuclear power, as well as its recent move away from using any coal-fired power.

“We must continue to manage our finances wisely, fund our reserves, and continue the investments that Californians depend on, from education to public safety, all the while preparing for Trump’s destabilization beyond our control,” the governor said in a statement. “This is what good governance looks like.”

Several environmental groups have been urging Newsom to invest more in clean air and clean vehicle programs, which they say are critical to the state’s goals for human health and the environment. Transportation is the largest source of air and climate pollution in California and is responsible for more than one-third of global warming emissions, said Daniel Barad, Western states policy manager for the nonprofit Union of Concerned Scientists.

“As federal attacks threaten California’s mandate to protect public health, incentives are more important than ever to promote clean cars and trucks,” Barad said. “The governor and legislative leaders must act now to fully fund clean transportation and pursue new funding to grow and sustain climate investments.”

Katelyn Roedner Sutter, California executive director of the nonprofit Environmental Defense Fund, called it “an important step to save Californians money, cut harmful pollution, encourage innovation, and support the global competitiveness of our auto industry.”

Although the budget proposal does not include new spending proposals, it does contain some items related to climate and the environment. Among them are plans to continue implementing Proposition 4, i A $10 billion climate bond approved by voters in 2024 for programs aimed at strengthening wildfires, safe drinking water, flood control, extreme heat mitigation and other similar efforts.

Among the $2.1 billion in climate bond investments proposed this year are $58 million for wildfire prevention and hazardous fuel reduction projects in vulnerable communities, and nearly $20 million to help homeowners with fire protection shelters. Water-related investments include $232 million for flood control projects and nearly $70 million to support maintenance of existing or new water transportation projects.

The proposal also sets aside money from California’s signature cap-and-trade program, which limits greenhouse gas emissions and allows big polluters to buy and sell unused allowances in quarterly auctions. State lawmakers last year voted to extend the program through 2045 and rename it cap-and-invest.

The spending plan includes a new combined cap-and-investment framework that first funds legislative obligations such as production tax exemptions, followed by $1 billion for a high-speed rail project, $750 million to fund the California Department of Forestry and Fire Protection, and finally secondary program funding such as affordable housing and low-carbon transportation options.

But while some groups applauded the budget’s handling of climate issues, others criticized it for relying too heavily on variable funding sources to prioritize the environment, such as special funds and one-time allocations.

The Sierra Club called the EV incentive program an important investment but said too many other items were left with “remedial measures that make long-term planning difficult.”

“Just yesterday, the Governor admitted in his State of the State address that climate risk is a financial risk. This is exactly why California needs sustainable and sustainable climate investment,” said Sierra Club director Miguel Miguel.

Environmental Voters in California, meanwhile, insisted the state should continue working on legislation that would hold oil and gas companies liable for damages caused by their emissions — a plan known as “Make Polluters Pay” that stalled last year amid strong compensation and industry pressure.

“Instead of asking families to pick up the costs, the Legislature needs to take a serious look at holding polluters accountable for the damage they’ve caused,” said Shannon Olivieri Hovis, chief strategy officer for Environmental Voters in California.

Sarah Swig, Newsom’s senior adviser on climate, noted that the federal budget plan came a few days after Trump withdrew the United States from the United Nations Framework Convention on Climate Change, which is a major global agreement signed by nearly 200 countries with the aim of addressing global warming through joint international measures.

“California is not mitigating climate change at a time when we continue to see attack after attack from the federal government, including as recently as this week with Trump’s withdrawal from the UNFCCC,” Swig told reporters Friday. “California’s leadership has never cared.”