EV Subsidies Trimmed in California’s Proposed Budget Cuts

Funding Reduction May Slow Transition to Zero-Emission Trucks
California Gov. Gavin Newsom
Newsom is also seeking to trim incentives for electric trucking to transport goods to and from ports. (Jeff Chi/Associated Press)

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As California faces a $68 billion deficit, Gov. Gavin Newsom has proposed significant cuts to clean energy and transportation programs designed to help the state confront the worsening effects of climate change.

Newsom’s proposed budget released Jan. 10 would cut and delay a net $4.8 billion from climate and transportation efforts. Most notably, he plans to cut subsidies for electric vehicles and funding for clean energy programs.

The move is likely to spur alarm from environmental advocates, as 2023 marked the hottest year on record and atmospheric carbon dioxide reached record levels. They say California cannot afford to cut back on plans to defend against climate extremes.

“The governor and Legislature’s commitments to fund the transition to zero-emission transportation are essential for protecting our health from air pollution and climate change,” said Bill Magavern, policy director for the Coalition for Clean Air.

He said major cuts to the zero-emission transportation budget will “make it harder for lower income Californians to afford EVs and slow down the transition to zero-emission trucks.”

To avoid deeper general fund cuts, Newsom is proposing more than $1 billion in backfill spending by shifting costs to a fund that receives revenue from the state’s cap-and-trade program.

During a press conference in Sacramento, Newsom highlighted international climate diplomacy and commitments to streamlining water infrastructure permitting, as well as dam removal on the Klamath River. He also noted future increases in federal climate spending.

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The governor committed $54 billion over five years during previous surplus budget years. After reducing that figure by a net $6 billion during last year’s deficit, his proposal for this year further lowers the total by $2.9 billion in reductions and $1.9 billion in delays.

“Spending on climate actually will grow,” Newsom said in response to questions about whether he overpromised. “I may have understated our capacity, because I never could have imagined what kind of support we would get from the federal government.”

The largest proposed cut to a climate-related program is a $200 million slash to clean transportation and mobility programs, including making cities more friendly to pedestrians and bicyclists. He is also seeking to trim incentives for electric trucking to transport goods to and from ports.

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