{"id":83805,"date":"2025-09-23T11:58:21","date_gmt":"2025-09-23T15:58:21","guid":{"rendered":"https:\/\/autosector.com\/?p=83805"},"modified":"2025-09-23T11:58:21","modified_gmt":"2025-09-23T15:58:21","slug":"california-7500-tax-credit-cm","status":"publish","type":"post","link":"http:\/\/autosector.com\/?p=83805","title":{"rendered":"‘GM Sold Us Out’: California Gov. Newsom Furious As $7,500 Tax Credit Disappears"},"content":{"rendered":"

California Gov. Gavin Newsom wanted his state to be the firewall that protected the public (and automakers) from the reality of the federal electric-vehicle tax credit going away.<\/p>\n

He pledged that Sacramento would step in and take up the slack created by the feds, but it wasn’t quite clear where the money was going to come from. With time running out on the tax credit and California already operating at a deficit, the unfortunate reality has rolled in that the state won’t be able to foot the bill<\/a>.<\/p>\n

But the true blame for the anti-EV measures cooked up in the Big Beautiful Bill? According to Newsom, that’s the American auto manufacturers, led by General Motors.<\/p>\n

Welcome back to\u00a0Critical Materials<\/strong><\/a>, your daily roundup for all things electric and tech in the automotive space. Also on deck: BYD issues a warning to Western automakers and Tesla’s first Full Self-Driving lawsuit in China is filed. Let’s jump in.<\/p>\n

<\/svg><\/span>30%: California Governor Says GM ‘Sold Us Out’ Over Emissions; It Can’t Replace The Fed’s $7,500 EV Tax Credit<\/h2>\n
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Photo by: Chevrolet<\/p>\n<\/section>\n

Instead, California is guaranteeing continued support in committing taxpayer funding towards infrastructure projects across the state.\u00a0Here’s the latest from Automotive News<\/em><\/a>:<\/p>\n

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California will not backfill a $7,500 federal tax credit for buyers of electric vehicles\u00a0that is set to expire this month, Gov. Gavin Newsom said, reversing an earlier pledge to restart the state\u2019s own EV subsidies.<\/p>\n

\u201cWe can\u2019t make up for federal vandalism of those tax credits,\u201d Newsom said during a press conference Sept. 19 in San Francisco. The state will support expanding EV infrastructure, but \u201cnot the direct subsidies that we cannot make up for,\u201d the Democrat said.<\/p>\n

President Donald Trump campaigned on rolling back many of former President Joe Biden\u2019s EV-friendly policies. Congress followed through in the major tax-and-spending bill, which placed a Sept. 30 expiration on the tax credit, ending years of federal support for EV buyers.<\/p>\n<\/blockquote>\n

The state’s budget deficit makes EV incentives tough to justify at the moment.\u00a0For example, more than 25% of all new 2024 vehicle registrations in California were EVs. It’s unclear how many of the\u00a0378,910 EVs<\/a> or their buyers qualified for the full tax credit, but assuming a maximum of $7,500 across the board, it could mean a maximum federal payout of around $2.84 billion in direct subsidies.<\/p>\n

Newsom also pointed the blame at the U.S. auto industry for the passing of anti-EV measures in the Big Beautiful Bill that revoked the EV tax credit. “<\/p>\n

GM sold us out,” Newsom said<\/a>, tying the tax credit revocation to the national undoing of California’s work on reducing tailpipe emissions and Congress blocking California’s planned 2035 gas car ban<\/a>.<\/p>\n

“Mary Barra sold us out, eliminating Ronald Reagan’s work, eliminating the progress we made under the California Air Resources Board in 1967, where we began the process of regulating tailpipe emissions. The Republicans rolled that back this year [under] Donald Trump’s leadership, but the American automobile manufacturers allowed that to happen,” Newsom said. “GM led that effort.”<\/p>\n

GM declined to comment to Automotive News<\/em>.<\/p>\n

GM has accepted that the tax credit era has come to an end. Like many automakers, it has been flushing out old stock ahead of the deadline while tapering down production of EVs to meet the anticipated demand. And in a recent letter to car shoppers and investors, GM said\u00a0not to expect “irrational” EV discounts after the tax credit ends<\/a>\u00a0after Sept. 30, and set expectations that EV sales will be down “for a while.”<\/p>\n

The market is\u2014with few exceptions\u2014now on its own, and the correction could weigh heavily on brands and supply chain partners in the coming quarters.<\/p>\n

<\/svg><\/span>60%: BYD Warns Western Automakers: ‘We Have The Technology’<\/h2>\n
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Photo by: BYD<\/p>\n<\/section>\n

Europe’s automakers have spent years nervously side-eyeing BYD, watching as the Chinese newcomer has become one of the top automakers by volume in the entire world. Now, as BYD amps up its EV conquest in Europe<\/a>, the brand finally has the confidence to lean in like it’s already winning the fight<\/p>\n

Recently, BYD Europe’s Regional Managing Director, Maria Grazia Davino, sat down with Euro News’ The Big Question<\/em><\/a>\u00a0to talk shop. In the interview, she issued a stern warning to Europe’s biggest players, knowing full well that the entire world is listening: BYD is ready to play the game and it even brought the dice.Here’s what Davino told The Big Question<\/em><\/a>:<\/p>\n

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People sit in the car and you surprisingly see that the immediate acceptance is there\u2014actually we exceed customers’ expectations.\u00a0<\/p>\n

This is not only my direct experience, [it\u2019s] what I observe, what customers tell me, what dealers tell me. The conversion rate from test drive to purchase is outstanding in every market.<\/p>\n<\/blockquote>\n

BYD’s rise has been extremely fast on a global scale. In just a few years, the Chinese giant went from being some region-specific outsider to one of the fastest-growing brands in Europe.<\/p>\n

Its formula is simple: sell good-looking cars packed with tech at an affordable price. That has led to BYD’s sales tripling<\/a> year-over-year while the incumbent\u00a0Tesla’s sales fell 40.2%<\/a>. Ultimately, BYD achieved a 1.2% share of the automotive market and overtook Tesla for the first time in the region, ever<\/a>.<\/p>\n

Davino says that BYD isn’t out to “conquer” the European auto industry. But those words may just be to avert so-called “smart protectionism” rules that trade groups like the European Association of Automotive Suppliers have called for across Europe<\/a> to combat the looming threat of Chinese EVs overtaking one of the EU’s most important industries.<\/p>\n

More from Davino:<\/p>\n

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We have superior technology and the product to play the game. There has been some narrative around it\u2014like \u2018you want to conquer\u2019\u2014no, it’s not about conquering, we can’t, we are so small compared to the others.<\/p>\n

I always say we are fuelled by the challenges that also humble us, and we are here to enrich the industry.<\/p>\n<\/blockquote>\n

Even if Davino won’t admit it, BYD’s cut into Europe’s market is deep. This is the home turf for many brands, and China’s continued market penetration shows that customers are taking a liking to foreign products more than what is developed in their own backyard<\/a>. It should be a call to innovate, but with rock-bottom pricing, it’s hard to do.<\/p>\n

Europe must now decide how to keep its industrial base intact. That means weighing tariffs, local content rules and possible partnership requirements for Chinese automakers.<\/p>\n

BYD’s answer is simple: “The line of the company is ‘collaborate and compete,'” said Davino. “That’s the key [to] future success for everyone. Collaborate and compete.”<\/p>\n

<\/svg><\/span>90%: Tesla Hardware 3 Owners Start To Revolt In China<\/h2>\n
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Seven months ago, Tesla officially released its FSD software in China. Since then, it’s been the subject of a number of lawsuits in the country, but one in particular is mirroring a bigger problem: Hardware 3’s incompatibility with full autonomy.<\/p>\n

When Tesla launched FSD in China, it sold the service with the same buzzwords we’ve seen elsewhere. In short, it lines up to the automaker selling the road to autonomy, but not autonomy itself\u2014at least not yet. Eventually, owners would be able to take advantage of a driverless car as long as they owned one car built after October 2016, since those have the hardware necessary to achieve full autonomy, even if Tesla deleted the blog post<\/a> claiming as much.<\/p>\n

But as it turns out, that isn’t the case. Tesla CEO Elon Musk confirmed it himself: millions of Teslas sold between late 2016 and 2023 don’t have the hardware necessary to perform the task<\/a>. Musk admitted that Tesla would need to upgrade the hardware in cars where owners bought FSD outright, but that still leaves thousands of owners who purchased the car after 2022 knowing they could buy a monthly subscription without the promise of a solution\u2014and, no, Tesla has not yet offered an upgrade for any HW3 owner.<\/p>\n

Needless to say, owners are running out of patience. Owners in the U.S. have already filed suits over Tesla’s failed promises and now a group of owners in China is doing the same<\/a>.<\/p>\n

Their argument is similar, too. The new suit accuses Tesla of failing to deliver on its promise of unsupervised Full Self-Driving for more than five years. It also\u00a0criticizes Tesla for failing to refund buyers who requested it after China’s rollout of FSD (which was renamed “Intelligent Assisted Driving<\/a>” to comply with stricter marketing requirements for semi-automated driving features) excluded HW3 cars.<\/p>\n

Reports from local media<\/a> say that China’s courts have accepted the lawsuit and will hear the plaintiffs’ case. Tesla has reportedly not yet responded to the allegations.<\/p>\n

<\/svg><\/span>100%: Is Brand Loyalty Enough To Retain Buyers In Europe?<\/h2>\n
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Photo by: BMW<\/p>\n<\/section>\n

Europe’s auto industry is worried about that storm headed its way from the East. Foreign brands like BYD are coming in hot with a massive push to secure market share locked away by industry veterans for decades.<\/p>\n

Brands and supply partners alike know that something needs to change to protect Europe’s manufacturing prowess. Some of the industry is\u00a0pushing for “smart protectionism” to guard the key players who can’t compete on price, while consumers could argue that a fresh new wave of innovation is the real solution to retain customers.<\/p>\n

So here’s where we toss around a hypothetical: if you had to choose between a tried-and-true brand, or the new startup with double the features at two-thirds of the price, which route would you go? Does that change if the brand doesn’t source its parts from a domestic supply chain partner? Let me know your thoughts in the comments.<\/p>\n

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California Gov. Gavin Newsom wanted his state to be the firewall that protected the public (and automakers) from the reality of the federal electric-vehicle tax credit going away. He pledged that Sacramento would step in and take up the slack created by the feds, but it wasn’t quite clear where the money was going to […]<\/p>\n","protected":false},"author":1,"featured_media":83806,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[4],"tags":[],"class_list":["post-83805","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-e-cars"],"_links":{"self":[{"href":"http:\/\/autosector.com\/index.php?rest_route=\/wp\/v2\/posts\/83805","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/autosector.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/autosector.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/autosector.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/autosector.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=83805"}],"version-history":[{"count":0,"href":"http:\/\/autosector.com\/index.php?rest_route=\/wp\/v2\/posts\/83805\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/autosector.com\/index.php?rest_route=\/wp\/v2\/media\/83806"}],"wp:attachment":[{"href":"http:\/\/autosector.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=83805"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/autosector.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=83805"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/autosector.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=83805"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}

California won’t be able to shield its residents from the end of the federal EV tax credit<\/a>\u00a0after Sept. 30 as planned. In a speech, Newsom confirmed that the state is not in a position to restart any direct EV subsidies to offset the loss of the $7,500 tax credit provided by the federal government, as reported by\u00a0Automotive News<\/a><\/em>\u00a0and SFGate<\/em><\/a>.\u00a0<\/p>\n