California’s Governor, Gavin Newsom, says that the state will offer tax incentives for EV sales if the US government drops them. At this point, the industry believes President Trump will kill the federal government program. The state credits can be as high as $7,500, a significant reason for people to consider EVs over gas-powered cars. Newsome’s decision has one crucial exception: Tesla (NASDAQ: TSLA) purchasers will not get the tax benefit. That is an important issue for America’s largest EV company in terms of market share. California is by far the largest EV market in the US.
California did have an EV tax credit program, but it ended in 2023. Newsome told Bloomberg that the arrangement would be resurrected, and he said the new one would include a provision for market share. He called these “market share limitations” when he talked to Bloomberg about the program.
The California Air Resources Board says the state has over 30% of all EVs sold in the US. This is not entirely because of California’s population, which is about 13%, the largest of any state in America. It may have to do with gas prices. In large cities in California, the price of a gallon of regular gas can be twice the national average.
California’s legislature needs to vote on the Newsom plan, which could change, so it is too early to say how it would affect Tesla’s US revenue. Tesla’s current US EV market share is 49%, and a drop in sales in California would dent that.
The decision would also hurt Tesla’s share price, which has increased 25% in the last month. After the news about Newsom’s proposal, it dropped 4%.
Get Ready To Retire (Sponsored)
Start by taking a quick retirement quiz from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes, or less.
Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests.
Here’s how it works:
1. Answer SmartAsset advisor match quiz
2. Review your pre-screened matches at your leisure. Check out the advisors’ profiles.
3. Speak with advisors at no cost to you. Have an introductory call on the phone or introduction in person and choose whom to work with in the future
Get started right here.
The post California Decision May Badly Dent Tesla Sales appeared first on 24/7 Wall St..
Click this link for the original source of this article.
Author: Douglas A. McIntyre
This content is courtesy of, and owned and copyrighted by, https://247wallst.com and its author. This content is made available by use of the public RSS feed offered by the host site and is used for educational purposes only. If you are the author or represent the host site and would like this content removed now and in the future, please contact USSANews.com using the email address in the Contact page found in the website menu.
