California is Ground Zero for Battles Over States’ Rights

The California government is preparing to defend itself against an incoming Trump administration that has put the state firmly in its crosshairs over its climate policies.

The relationship between the Democratic leadership of California and Donald Trump’s federal government over the next four years is likely to be tense and contentious. Anticipating trouble from a well-organized Trump team, Governor Gavin Newsom is shoring up the state’s defenses against a coming onslaught from the Republican trifecta in Washington.

Protecting a Commitment to Clean Transportation

Trump has made no secret of his desire to curtail California’s authority to set nation-leading vehicle emissions and to eliminate a $7,500 federal tax credit for electric vehicle purchases. Should the tax credit disappear, Newsom is promising to resurrect his state’s own rebate program, which would provide tax credits for eligible purchases. The previous program ended in 2023 after 15 years and more than $1.4 billion in rebates.

This time, the program’s eligibility standards would likely be tweaked to enhance competition in the EV market and increase affordability for low-income buyers. This would most probably result in the exclusion of Tesla, which has a 54% market share in California. Tesla CEO Elon Musk – now a member of Trump’s inner circle – announced in April that the company would no longer develop the long-planned Model 2, which was targeted to sell for $25,000. The decision reversed course on an original part of Musk’s master plan for the company. As recently as January 2024, he had promised investors a low-cost vehicle, and they expected such a car to drive the company’s next wave of growth.

In Trump’s first term, automakers backed his unsuccessful attempt to eliminate California’s ability to set its own air quality standards. But this time around, at least for now, the Alliance for Automotive Innovation, representing most of the world’s major automakers, is urging Trump to keep the EV tax credit.

Funding a Legal Defense

Anticipating a slew of challenges from the returning president, Newsom has proposed a $25 million legal fund to defend state policies. The state Legislature has taken up the proposal in a special session begun early in December. It is also considering an additional $10 million fund for cities and counties to similarly defend against actions from the new administration they view as adversarial. Given that  Democrats have a supermajority in both the state House and state Senate, the proposals are expected to pass.

Citing California’s role in shaping the nation’s economy, Newsom stated, “We will work with the incoming administration, and we want President Trump to succeed in serving all Americans. But when there is overreach, when lives are threatened, when rights and freedoms are targeted, we will take action.”

The need to prepare for and fund a potential wave of legal action is based on experience; the state brought 122 lawsuits against the first Trump administration to protect the environment and defend other policies that came under attack.

Officials in several other “blue” states have also been active in efforts to, as some call it, “Trump-proof” their policies. Trump’s promise to conduct mass deportations of undocumented immigrants is one of their most common concerns, as is preserving policies that assure access to abortion. With the expectation that much of their resistance will be mounted in the courts, state attorneys general in California, New York, New Jersey, and elsewhere are already considering possible legal arguments and identifying which courthouses they should file in.

Where these legal battles are conducted could be particularly significant given the large number of judges Trump put on the federal bench during his first term and how his picks have supported him during the past four years – from Judge Aileen Cannon‘s decisions to delay the prosecution of and ultimately dismiss the case against Trump for allegedly mishandling classified documents to the expansive ruling on presidential immunity from the six conservative justices on the Supreme Court, half of whom were picked by Trump.