California has stepped in to support electric vehicle (EV) adoption with a $270 million rebate program aimed at offsetting the end of federal EV tax credits. The new initiative will provide residents with a $3,500 rebate on qualifying new electric vehicles priced at $50,000 or less and a $1,750 rebate for eligible used EVs costing $25,000 or below.
The program, signed into law by Governor Gavin Newsom, is set to launch later this summer. It is financed through California’s state budget combined with funds from participating automakers, though the California Air Resources Board has yet to release the list of manufacturers involved. This announcement comes after federal incentives, which offered up to $7,500 in tax credits for new EV purchases and $4,000 for used models, were repealed under legislation signed by former President Donald Trump.
Governor Newsom framed the state’s move as a response to the federal government’s withdrawal of support, emphasizing California’s commitment to advancing clean transportation and competing globally. Despite the state’s strong track record—with over 1.25 million EVs registered and electric vehicles making up about one in five new car sales last year—recent data has shown a decline in zero-emission vehicle sales during the current year’s first quarter.
This rebate program replaces the previous California EV incentive, which ended in 2023 after distributing roughly $1.49 billion in subsidies that helped purchase approximately 586,000 electric vehicles over a decade. The state continues to promote policies aimed at expanding EV adoption, even as legal challenges persist against California’s plan to phase out new gas-powered vehicle sales by 2035. Federal actions have targeted the state’s emissions rules, keeping the issue in ongoing litigation.