California has introduced a new $270 million rebate program designed to encourage the purchase of electric vehicles (EVs) as federal incentives for such purchases have been eliminated. Gov. Gavin Newsom signed the legislation on Monday, with the program expected to launch later this summer.
The initiative will provide California residents with a $3,500 rebate for qualifying new electric vehicles priced at $50,000 or less. Additionally, a $1,750 rebate will be available for qualifying used electric vehicles that cost $25,000 or less.
State officials indicated that the program is funded through California's budget and contributions from participating automakers. A list of manufacturers involved is anticipated from the California Air Resources Board next month. The previous federal program had offered tax credits up to $7,500 for new EVs and $4,000 for used models before they were repealed. Newsom stated on X that California is stepping in to fill the void created by the elimination of federal tax credits, asserting, "We won’t forfeit the future to China."
California has seen significant EV adoption, with over 1.25 million electric vehicles registered in the state, accounting for approximately one in five new vehicle sales last year. However, recent data from the California New Cars Dealers Association revealed a slowdown in zero-emission vehicle sales in the first quarter of this year compared to the same period in 2025.
This new rebate program succeeds California's prior incentive initiative, which concluded in 2023 after distributing about $1.49 billion and subsidizing roughly 586,000 EV purchases over a decade. The state continues to pursue policies supporting EV adoption, even amidst ongoing legal challenges to its 2035 plan to phase out the sale of new gasoline-powered vehicles.