EV Rebates Returning to California: What This Means for You

Photo Credits: Los Angeles Times

A recently passed senate bill is enabling the California Air Resources Board to set the incentives for all electric vehicles in California.

Following a period of over nine months in which Californian EVs had no incentives attached to them, CA Governor Gavin Newsom has set aside $135 million in his latest budget plan intended to change just that.

With eligible buyers projected to receive a $3,500 discount on new EVs (and $1,750 on used ones), these incentives take effect at the time of purchase, meaning that buyers can receive massive returns on their purchases without complicated paperwork or waiting until tax season. Already cheap vehicles will become even more affordable, like the 2026 Nissan Leaf with a base price of just shy of $30,000, where a $3,500 rebate would represent over an 11.5% price drop from the status quo.

With such a large sum of the state budget set aside for said EV incentives, half of the subsidy will fall onto the auto manufacturers. The EV rebates help an “already… good deal become an even better deal” says auto analyst Brian Moody, yet these good deals come with a multitude of asterisks. For one, these incentives cannot be used on any new electric vehicles, so long as they carry a price tag of $50,000 or less. The same conditions apply to used EV car sales, taking the price limit down a notch to just $25,000. Despite this, a special exclusion outlined in the bill makes an exception for EV manufacturers based in California – removing the effective $50,000 sale price limit for purchasers, allowing them to receive the rebate regardless of vehicle cost. This becomes particularly interesting regarding auto manufacturers like Lucid and Rivian, as they are the brands benefitting the greatest from this Californian manufacturer price cap exemption.

However, there is one notable wrinkle for many CA consumers – California’s new EV discount is only available to first time purchasers. This status will be confirmed through the buyer’s word that they have not previously owned an electric vehicle, and will take place prior to purchase of the vehicle. While this limits the scope of the rebates, it still allows the focus group (non-electrified car owners or users) to receive the benefits they need to go through with electrification, and as EVs for All America’s research demonstrates: when a consumer goes electric, they hardly ever go back.

While the incentives remain under half of what the previous federal incentives were prior to their expiration nearly a year ago, they do an excellent job of promoting the purchase and use of electric vehicles in California. This falls closely in line with the state’s clean air and EV goals, including decreasing smog limits and requirements on electric vehicle sales.

EVs for All America is pleased to see the introduction of the bill and hopes to see the purchase incentive further fuel California’s status as an EV leader in the US, who disappointingly backtracked on the $7,500 federal EV tax credit last year with the One Big Beautiful Bill Act, slowing down incentives for advanced domestic manufacturing of vehicles and batteries promoted under the earlier Inflation Reduction Act.

Read More from the LA Times’ Reporting.