With new electric vehicle prices averaging nearly $55,000 and the federal government no longer offering $7,500 in tax credits for plug-in vehicles, 13 major automakers are confirming plans to participate in California’s new $3,500 instant rebate program for new EV buyers in the state.
California Gov. Gavin Newsom, a Democrat, said in a July 16 news release that he has secured commitments to participate in the new EV rebate program from “13 major automakers are teaming up with the Golden State to offer instant rebates to Californians buying or leasing their first zero-emission vehicle.” Newsom noted that his state’s new EV rebate program comes after the federal government eliminated a popular $7,500 tax credit for electric cars last year at the direction of President Donald Trump.
“While Trump hands the keys to the clean car industry over to China, we are signaling to the world that California is open for business,” Newsom said in a statement. “We’re all-in on cutting costs for working families and keeping American manufacturing jobs in the fight. The future should be built in America.”
California’s new EV discounts come from a $135 million pot of state money that is included in a recently announced budget deal that has been reached between Newsom and leaders in the state’s legislative branch and later signed into law by the governor. Additional money for the EV rebate program will come from automaker-funded grants, California officials have said.
Which Automakers Are Participating in California’s “MyFirstEV” Program?
Newsom’s office said the following automakers are participating in his state’s new EV incentive program:
- Ford
- General Motors
- Honda
- Hyundai
- Kia
- Lucid
- Mitsubishi
- Nissan
- Rivian
- Subaru
- Tesla
- Toyota
- Volvo
Why Is California Stepping in to Offer EV Tax Rebates?
Newsom’s plan comes nearly two years after President Donald Trump’s 2024 election win, when Newsom pledged he would step in to offer electric vehicle tax credits to consumers if Trump followed through on campaign promises to end the popular $7,500 federal credit. Trump pushed legislation through Congress that ended the federal tax credit on Sept. 30, 2025.
California is home to the largest percentage of car buyers who opt for electric cars.
According to the Alliance for Automotive Innovation, which lobbies in Washington, D.C., for most major automakers, EVs and hybrid cars composed 17.5% of new light-duty vehicle registrations in California in the first quarter of 2026, which is the most recent data the group has made publicly available. California was the only state above a 20% market share in 2025.
Carmakers have lamented the loss of the federal incentive for EVs, and several have slashed plans to build future electric models in light of the shift in the federal government’s support for the technology.
California Air Resources Board Chairwoman Lauren Sanchez said in an exclusive interview with USA TODAY in January that her state is stepping up to offer at least some portion of the nation’s EV buyers rebates because “the rest of the global market is moving toward” Zero Emission Vehicles, despite the backsliding in the level of federal support under Trump.
EV supporters have praised California for stepping in to fill at least part of the breach.
“When Congress killed the federal EV credit, the real threat to auto jobs was a demand air pocket,” the American EV Jobs Alliance, which is an advocacy group that works with car manufacturers to push U.S. and state lawmakers to adopt EV-friendly policies, said in a statement.
“Soft order books lead to revised production forecasts, which lead to reevaluated plant investments, which lead to layoffs,” the group’s statement continued. “California just closed that gap in its market and got automakers to fund half of it.”
Who Will Qualify for California’s EV Rebates?
California’s EV rebates will be limited to residents of the state who have never purchased an electric car before. The discounts are expected to start being made available to car buyers by the end of the summer.
The rebates will be available to car buyers at all income levels, but the new EVs have to cost less than $50,000, according to the law authorizing the rebates that was signed by Newsom. The price cap for used EVs will be $25,000, according to the law.
There’s a big catch, though: The California law states that there will be no price limits on rebates offered for cars made by “California-headquartered zero-emission vehicle companies,” which is a big boon to EV manufacturers like Rivian and Lucid. The largest U.S. electric vehicle maker, Tesla, was started in California, but the company moved its headquarters to Austin, Texas, in recent years.
How Much Do Used EVs Qualify For?
Under the California budget agreement, rebates will also be available for used EVs, but those buyers will only get $1,750.
Under the old federal tax credit, used EVs qualified for up to $4,000 in tax credits. The used EV tax credit was added for the first time in 2022 by former President Joe Biden’s administration. Prior to that, only new EVs qualified for any tax credits at all.
Can You Buy an EV in California From Out of State and Get the Rebate?
California’s previous EV rebates were limited to state residents, and the latest round of discounts will also be limited to people who live in the state.
EV shoppers in other states might find solace in the fact that multiple states have often replicated California’s auto emissions regulations, and some might decide to copy the state’s plans to offer rebates to shoppers. According to the California Air Resources Board, 17 states have adopted at least part of California’s clean car regulations in recent years.
The American EV Jobs Alliance said it is planning to push as many states as possible to follow California’s lead on reviving EV discounts for first-time buyers.
“Thirteen companies just went on record that American EV demand is worth their own capital,” the group said. “That is the most useful fact we have going into 2027 legislative sessions. We are taking this model to other states.”
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