California is bringing back EV rebates. This is how to get one

California has launched a $135 million incentive program to revive electric vehicle adoption following the expiration of federal tax credits. Established under Senate Bill 168, the program offers instant point-of-sale rebates of $3,500 for new EVs and $1,750 for used models to first-time buyers. This state-level intervention aims to protect California's position as a market leader and support domestic manufacturers like Rivian and Lucid through strategic price-cap exemptions.

Under the new state budget that went into effect in July 2026, Governor Gavin Newsom has allocated $135 million to provide new incentives for electric vehicles, a move designed to fill the gap left by the expiration of federal tax credits. The program, managed by the California Air Resources Board (CARB) under Senate Bill 168, requires participating automakers to match the state's funding. Unlike previous federal credits that required a tax filing, these incentives provide an instant discount at the point of sale. Eligible buyers can receive $3,500 off for new EVs and $1,750 for used models, provided they are first-time EV owners and can provide a buyer attestation to confirm their status.

The program includes specific price caps to target the mass market, limiting rebates to new vehicles with an MSRP of $50,000 or less and used vehicles priced under $25,000. However, the legislation includes a strategic exception for California-based companies, allowing buyers of vehicles from Newark-based Lucid or Irvine-based Rivian to claim the discount regardless of the vehicle's price. This is particularly relevant for Rivian, which is currently delivering its R2 Performance vehicles starting at $57,990 and does not expect to release a sub-$50,000 model until 2027. This provision ensures that California's domestic EV manufacturers remain competitive despite their higher price points.

Industry experts suggest that while the $3,500 incentive is significantly lower than the $7,500 federal credit that expired in September 2025, it remains a vital tool for maintaining momentum in the nation's leading EV market. Auto analyst Brian Moody observed that the rebate makes used EVs an even better deal, though the lower dollar amount may primarily attract those already intent on purchasing an EV rather than swaying undecided consumers. The state's intervention comes as the market navigates federal policy shifts under the Trump administration and a new lawsuit targeting California’s ability to set car emissions standards—rules currently followed by 17 other states. Despite these hurdles, California continues to lead the nation in adoption, having already surpassed its 2012 goal of putting 1.5 million zero-emission vehicles on the road.