California Proposes $200M EV Incentive — Mike Murphy on State of Charge

January 11, 2026

EVs for All America Founder and CEO Mike Murphy joined our pal Tom Moloughney on his great State of Charge YouTube channel to talk about the new California state EV incentives.

Background

California Governor Gavin Newsom has proposed a $200 million state electric vehicle incentive program to help offset the federal EV tax credit that recently expired. The proposal — part of the governor’s 2026–27 budget plan — would establish a new light-duty zero-emission vehicle (ZEV) rebate program for Californians, signaling the state’s continued leadership in EV adoption despite federal cutbacks.

The American EV Jobs Alliance issued a statement praising the proposal, calling it “smart policy for American auto manufacturing jobs and for consumers who want to try an EV,” and highlighting collaborative work with state agencies to shape practical, consumer-focused incentives.

Why This Matters

  • Replacing Federal Support: The federal $7,500 EV tax credit ended in 2025, leading to sharp declines in EV sales in California and nationwide. California’s proposal aims to close that gap with targeted state funding.
  • Point-of-Sale Rebates: Unlike tax credits claimed months later, a state rebate could provide immediate cost savings at the point of purchase — an approach seen as more effective for many buyers.
  • Consumer Support: Independent research by EVs for All America shows that more than two-thirds of Californians support a roughly $3,500 EV credit for new and used EVs, especially first-time buyers.
  • Policy Design Matters: Mike Murphy highlights the importance of structuring incentives to convert new drivers, not just subsidize repeat purchases, and of designing eligibility rules that broaden participation rather than restrict it. (See video above.)

What Mike Murphy Said on State of Charge

On State of Charge, Murphy breaks down how the new California proposal came together, why a “conquest credit” (first-time EV incentive) can stretch public dollars further, and what the next 6–8 months of policy work likely look like as the budget and implementation details are negotiated.
He explains:

  • California’s leadership role in U.S. EV sales and why state incentives are crucial with federal support gone.
  • How a properly designed state rebate can help bring new drivers into the EV ecosystem, including used EV buyers.
  • The importance of spreading this model to other top-EV states to rebuild demand nationwide.

Next Steps

  • The governor’s budget proposal goes to the California Legislature for approval during spring budget negotiations.
  • State agencies such as CARB and the California Energy Commission will craft the program’s structure, including rebate amounts and eligibility criteria.
  • If enacted, implementation could begin as early as late 2026, with additional refinements to maximize impact on adoption and equity.