The Biden administration has officially granted California permission to ban new gas car sales in the state by 2035. 

California set a strict emissions standard that would ban new gas cars in the state by 2035, but officials needed to obtain a waiver from the Environmental Protection Agency (EPA) in order to proceed with the mandate.

The EPA on Wednesday announced that it would be approving two waivers, under the Clean Air Act, that grants California permission to phase out gas cars in the state — one of President Biden's final acts pushing the auto industry into the green energy sector. 

One waiver grants California's near future request to mandate that 35% of new cars and light-duty trucks sales be zero emissions by 2026 and achieve 90% below current emissions by 2027.

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The other EPA waiver allows California officials to mandate that all new car sales be zero-emission within the decade — the most strict EV mandate in the country.

However, the waivers could soon be revoked by President-elect Trump, who is reportedly planning to rescind both federal EV requirements and any waiver issued for California by the Biden administration.

"Fresh off imposing his insane, job-killing electric vehicle mandate at the federal level, Crooked Joe Biden is preparing to slaughter the remnants of the U.S. auto-industry by approving California’s waiver request outlawing the sale of all gasoline-powered automobiles," incoming White House press secretary Karoline Leavitt told Fox News Digital during the campaign.

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EPA Administrator Michael Regan said that the waivers will "protect its [California] residents from dangerous air pollution coming from mobile sources like cars and trucks."

However, American Fuel & Petrochemical Manufacturers CEO and President Chet Thompson described the mandate as "unlawful."

"Contrary to claims on the campaign trail that they would never tell Americans what kinds of cars we have to drive, the Biden-Harris EPA just did exactly that by greenlighting California’s ban on sales of all new gas and traditional hybrid vehicles," Thompson said in a statement. "These policies will harm consumers — millions of whom don’t even live in California — by taking away their ability to buy new gas cars in their home states and raising vehicle and transportation costs."

Gov. Gavin Newsom is already planning on pushing back against President-elect Donald Trump's policies derailing the current administration's green energy push. 

President Joe Biden implemented a tax credit of up to $7,500 to incentivize the purchase of greener vehicles, but Trump is reportedly planning to ax the tax credit when he assumes office, sources with knowledge of the matter told Reuters.

Newsom, in a statement Monday, revealed that he will offer the same EV rebate for Californians in the case that Trump gets rid of the credit.

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"Consumers continue to prove the skeptics wrong – zero-emission vehicles are here to stay," Newsom said in a statement. 

"We will intervene if the Trump Administration eliminates the federal tax credit, doubling down on our commitment to clean air and green jobs in California. We’re not turning back on a clean transportation future — we’re going to make it more affordable for people to drive vehicles that don’t pollute," the governor added.

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The Golden State EV credits would be funded by a relaunch of the Clean Vehicle Rebate Program, the state's electric car incentive program that closed in November 2023, according to a press release from the governor's office.

The announcement comes just one week ahead of Newsom's emergency special session that he called after the election to bolster the blue state's legal response to any future attacks from the incoming Trump administration.

However, Newsom has a long history of hitting back against Trump's policies, having launched more than 100 lawsuits against the president-elect during his first administration alone.

President-elect Trump is reportedly considering rolling back the Biden administration's credit for electric vehicles – a move that experts say would have varying effects across the automotive industry.

President Biden implemented a tax credit of up to $7,500 to incentivize the purchase of greener vehicles. However, sources with knowledge of the matter told Reuters that Trump plans to ax the tax credit as part of his sweep of Biden's climate agenda.

While the decision remains in debate among oil and energy advocates, one group promoting public policy on behalf of the natural gas industry suggested that behind the scenes, automotive groups and consumers could feel relieved if the EV credit is eliminated.

"Losing $70,000 on an EV is not a winning business model and U.S. automakers know that," said Tim Stewart, president of the U.S. Oil & Gas Association. Stewart said axing the EV tax credit gives members of the auto industry the opportunity to shift back to traditional production lines.

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"If I was a CEO, I would quietly be relieved to have a reason to shift production lines back to traditional models and invest in new hybrid technologies," Stewart told Fox News Digital. "The EV tax credit was the only way to entice consumers to ‘maybe’ purchase something they really didn’t want, but told by the Biden folks they had to buy." 

"With the tax credit gone and the onerous Biden regulatory mandates lifted, the new administration is providing the exit ramp the U.S. producers were really hoping for, and U.S. consumers really want."

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However, proponents of the tax credit, such as Energy Secretary Jennifer Granholm – and those advocating for the switch to EVs – say its elimination would result in the U.S. being less competitive in the industry.

"The auto industry is investing billions of dollars in EV battery and EV manufacturing in the United States. Eliminating the tax credit will hurt the U.S. auto industry and make American manufacturers less globally competitive," said Ingrid Malmgren, senior policy director of Plug In America, a Los-Angeles based nonprofit advocating for the transition to EVs.

The elimination of the tax credit could have differing effects across the auto industry, experts say.

One of Trump's strongest allies, Tesla CEO Elon Musk, revealed in July that he supports getting rid of the credit. "Take away the subsidies," Musk posted to X, saying "it will only help Tesla."

Companies that are financially sound, such as Tesla, could benefit if the playing field for electric vehicles is narrowed, while the smaller companies that rely on the tax credit for consumer affordability could face setbacks, analysts suggest.

"Tesla has such a big cost advantage in EVs," said David Whiston, an analyst at financial services firm Morningstar Inc, according to a report from CPA Practicing Advisor. "Getting rid of that tax credit wouldn’t necessarily hurt them."

Dan Ives, a senior equity research analyst covering the technology sector at Wedbush Securities with a focus on EVs, conducted a review of the market impact on Tesla if the EV credit is removed.

"While this is a clear negative for the EV industry at first look and would particularly hurt GM, Ford, Stellantis, and Rivian... on the flip side, we view this as a net bullish move for Tesla and Musk over time," Ives said in a report on Tesla. "We expect Musk to have a big seat at the table as these EV discussions happen within the Trump transition team."

"In line with our thoughts over the past few weeks, Tesla has a scale and scope that is unmatched and while losing the EV tax credit could also hurt some demand on the margins in the U.S., this will enable Tesla to further fend off competition from Detroit as pricing/scale/scope is apples to oranges when compared to the rest of the auto industry once the EV tax credit disappears," Ives added.

Ives also said that removing the credit could slow down the shift toward EVs in Detroit, specifically.

During his campaign, Trump highlighted his intent to target Biden's clean energy-driven initiatives, such as vowing to "cancel the electric vehicle mandate."