California EV Rebate Applies Almost Exclusively To The Mustang Mach-E

After the U.S. government ended its EV tax credits, some states stepped up to offer their own incentives. California was one of them, offering customers buying or leasing an EV for the first time $3,500 toward the purchase of a new car, or $1,750 for a used one. That sounds like a good deal, but it's only good if you can actually use it. A study by Bestest found just 32 used EVs that were priced under $25,000, the threshold for the used car incentive, and 31 of the available 32 cars were Ford Mustang Mach-Es

The reasons for this go back to exactly how California's MyFirstEV program was set up and the stipulations it places on the credit. On the plus side, the incentive is an immediate discount on the purchase price of the vehicle, not a tax credit that you have to claim later like the federal one was. The state splits the cost of the incentive with manufacturers who choose to participate. At the moment, only Ford, Volvo, Lucid, and Rivian put up the cash for the used car incentive — limiting the number of used options right away. Cadillac, Chevrolet, Genesis, Honda, Hyundai, Kia, Lexus, Nissan, Subaru, and Toyota participate in the program, but only with new models, likely because that's where the real money is. 

Note that Tesla, by far the most popular EV, is not on this list. The brand did participate in the beginning, but manufacturers choose how much money they want to contribute toward their half of the incentive. When that money runs out, the state discontinues the incentive for that brand. Tesla's contribution got used up in just five days, so no more discount unless Tesla tosses more money in the pot.

Another MyFirstEV requirement is that the program only works with zero-emission vehicles, which means battery-electric (or fuel cell, but Toyota can't even give them away) vehicles, so no hybrids qualify. Used EVs must be at least two years old to qualify, and must be sold by the brand's own dealer (or directly in the case of Rivian and Lucid). That rules out private sales, used car lots, and larger used-car retailers like CarMax and Carvana. It even rules out a used Ford Mustang Mach-E for sale at a Chevy dealer.

Eligible cars must be certified pre-owned through whatever program the manufacturer offers. This may or may not ensure a better-quality car, but it will cost more than a non-CPO car. That, combined with a $25,000 price cap for most manufacturers, disqualifies most otherwise eligible cars for the used MyFirstEV incentive. While Bestest found over 3,000 used EVs for sale in California for less than $25,000, only 31 Ford Mustang Mach-Es and a single Volvo XC40 Recharge qualified.

What about Rivian and Lucid? They qualify for an exception to the $25,000 price cap because both companies are based in California. (Tesla, though founded in California, officially moved to Texas in 2021, so it wouldn't qualify for this exception even if it did put in more money.) The least expensive vehicle from Rivian or Lucid that Bestest could find that qualified for the incentive had a price of $34,500. That's a whole different bracket, and one that's likely out of reach if a potential EV buyer is looking to spend under $25,000. Perhaps California should have named the MyFirstEV incentive for used cars "MyFirstMustangMach-E" instead.