California has agreed to fund a first-time electric vehicle buyer incentive as part of its state budget. The program’s design closely reflects the policy recommendations that came out of our research at EVs for All America: deliver the incentive at the point of sale, focus on first-time EV buyers, set no income cap, and pair every state dollar with a dollar-for-dollar match from automakers, for both new and used vehicles.

It is a clear example of what happens when independent research informs practical policy. Below is how the evidence shaped the design, what the budget delivers, and what comes next.

The challenge

With the federal EV tax credit gone, EV affordability has become one of the central barriers slowing adoption. At the same time, public dollars are limited, and not every incentive design delivers the same return. The question facing policymakers was not only whether to support EV buyers, but how to do it in a way that grows the market efficiently, protects taxpayers, and strengthens American EV manufacturing.

Our research set out to answer that question with evidence rather than assumption.

What the research recommended

Our analysis pointed to a specific model, and the enacted program reflects each of its core elements:

• Point-of-sale delivery. Savings should reach buyers instantly at the dealership, not months later through a tax filing. Upfront savings change purchase decisions in a way that delayed rebates do not.
• A focus on first-time EV buyers. Targeting people buying their first EV is one of the most efficient ways to expand the market, because it brings new drivers into the category rather than subsidizing those who would have bought anyway.
• No income cap. Removing the income cap opens the door to working families across the state who have never owned an EV, broadening access and participation.
• A dollar-for-dollar automaker match. Requiring participating manufacturers to match the state’s contribution stretches every public dollar and invites industry to invest alongside the state. The match is among the first of its kind in the nation.
• New and used vehicles. Covering used EVs as well as new ones widens the range of price points and makes the program meaningful for more households.

CARB is building the program around these recommendations, with a $3,500 incentive for new vehicles and $1,750 for used vehicles, delivered at the point of sale.

Why first-time buyers

The case for centering the program on first-time buyers rests on a simple, well-documented pattern: once drivers make the switch to an electric vehicle, the large majority stay. First-time buyer incentives therefore do more than subsidize a single purchase. They convert new drivers into long-term EV owners, building durable demand that supports American and allied automakers and the jobs that come with them.

That retention effect is what makes the first-time buyer model one of the most efficient uses of public funds: each incentive is an investment in a likely lifelong EV driver, not a one-time discount.

What the budget delivers

The budget provides $135 million in state funding for the program. Matched dollar-for-dollar by participating automakers, that investment is designed to deliver more than $270 million in point-of-sale savings for Californians buying their first EV.

The California Air Resources Board (CARB) will administer the program, providing a $3,500 incentive for new vehicles and $1,750 for used vehicles, and entering into the grant agreements with automakers that activate the match.

What comes next

With the funding secured, attention turns to implementation. CARB will now design the program’s operational details and sign grant agreements with participating automakers so that incentive dollars can begin flowing to dealerships. The sooner those agreements are in place, the sooner first-time buyers will see savings at the point of sale.

We look forward to supporting an effective, evidence-based rollout, and to continuing to provide the research and analysis that helps policymakers design programs that work.

Thank you

We are grateful to Governor Newsom, the Legislature, and the many partners who helped turn research into real savings for California drivers. This is what it looks like when good data meets good policy.

Read more about the win at The American EV Jobs Alliance.