New California Incentive Gives Some First-Time EV Buyers $3,500 Instant Discount

If you can believe it, June 30 marks the eighth month that U.S. car buyers have gone without the $7,500 federal electric vehicle tax credit that President Donald Trump revoked late last year. At the time, Commiefornia Governor Gavin Newsom said that his state would step in if Trump did away with the federal tax credit, and a new budget deal (SB-111, though SB-168 outlines the EV credit) that Newsom reached with the state's legislative branch does just that. $135.5 million of state money will partially fund a $3,500 instant rebate to first-time EV buyers in the state, with the other half of the money coming from participating automakers that must match the state contributions. Not too shabby, Gav.

According to USA Today, "rebates will also be available for used EVs, although the amount has not yet been released publicly." It's a cash-on-the-hood credit, which means unlike the old federal tax credit, new EV buyers and lessees won't have to apply for the money later on — it'll be applied at the time of purchase. New EVs will get $3,500 on the hood, while the incentive is half that for used EVs. There are some stipulations beyond it just being for first-time EV buyers, including that qualifying new EVs cannot have an MSRP of more than $50,000, and used EVs cannot exceed $25,000. That is, unless the new EV is built by a zero-emission vehicle company that's headquartered in California, in which case it will receive the incentive regardless of price. Sorry, not sorry, Tesla.

The stakes for mass electrification are higher in California than any other state, primarily due to the densely populated and frequently smoggy Los Angeles area. The LA basin is notorious for its poor air quality, caused partially by the geography of the region, and primarily by the tailpipe emissions of the over 6.5-million registered vehicles in LA County. California is the only state in the U.S. that ended up with EVs and hybrids accounting for over 20% of the new vehicles registered in 2025, so the new proposed incentives ought to bump that up even higher.

Other requirements for qualification for the incentive include a maximum curb weight of 8,500 pounds, and the vehicle must be registered to a California resident. Regarding the California-based ZEV company clause, it's possible that this exemption could be ruled invalid should a non-California-based manufacturer win a court case deciding that, but for now, it's baked into the new budget. 

Given the utterly absurd weather across the globe lately, it's amazing that anyone can deny the effects of human-caused climate change, and yet plenty of people don't seem to care. Even if you don't care about climate change, you might care about how much extra money you're wasting on every gallon of gasoline thanks to President Trump's decision to start a war with Iran and send the planet into an energy crisis. Hopefully this incentive encourages more people to buy or lease EVs.