California governor announces incentive proposal to invest $1.5 billion to promote electric and hydrogen-powered cars

It is reported that Tesla and other electric carmakers will benefit if California finally passes the $4.5 billion 2021 stimulus budget proposed by the state's governor, Gavin Newsom.

Newsom's 2021 budget proposal includes $1.5 billion in earmarked funds to help people and businesses buy electric or hydrogen vehicles and related equipment, and will invest in the construction and maintenance of charging and hydrogenation infrastructure, which is also needed to promote the use of electric and hydrogen vehicles in the state.

Newsom's proposal also includes a $300m earmarked for maintaining and "greening" the state's infrastructure and building electric vehicle charging stations in all infrastructure, possibly from companies such as Tesla, ChargePoint, Electrify America (Volkswagen Group) and Volta Charging.

Over the past year, California's voters and economy have been hit by severe wildfires, and Newsom has repeatedly said he believes pollution and climate change are emergencies that require immediate action.

To achieve this goal, in September 2020, Newsom signed an order banning the sale of new internal combustion engine cars in California by 2035. The order still allows residents to use old fuel cars and sell them on the second-hand market, but the policy is likely to reduce the number of fuel vehicles, thereby helping to reduce greenhouse gas emissions.

The latest 2021-2022 budget proposal is likely to benefit all manufacturers selling electric and hydrogen-powered new and used cars in California. In 2021, more manufacturers will start producing and selling electric and hydrogen-powered cars.

Sam Fiorani, vice president of global car forecasting at AutoForecast Solutions, believes that in next year alone, 11 electric vehicles made in North America are expected to enter the US market, while Tesla will also launch a new Model S. In addition, there will be imported electric vehicles in the US market, such as the Nissan Ariya and Volkswagen ID.4, which will also be sold in California.

Other elements of the Newsom proposal will also benefit Tesla. Newsom said the state government should expand "interest-free payment options for large companies, especially those severely affected by the epidemic" and recommended "430 million dollars in incentives and subsidies for companies settled in California" and support "job creation and infrastructure investment". Newsom is expected to release a full version of its budget proposal on January 8th.