TSLA375.880-2.15%
GM83.7301.36%
F12.0400.0401%
RIVN13.465-0.075%
CYD28.040-0.12%
HMC33.2900.635%
TM188.7003.98%
CVNA59.030-0.48%
PAG193.440-1.23%
LAD286.445-0.005%
AN154.050-1.39%
GPI229.6900.05%
ABG163.275-0.655%
SAH60.9000.09%
TSLA375.880-2.15%
GM83.7301.36%
F12.0400.0401%
RIVN13.465-0.075%
CYD28.040-0.12%
HMC33.2900.635%
TM188.7003.98%
CVNA59.030-0.48%
PAG193.440-1.23%
LAD286.445-0.005%
AN154.050-1.39%
GPI229.6900.05%
ABG163.275-0.655%
SAH60.9000.09%
TSLA375.880-2.15%
GM83.7301.36%
F12.0400.0401%
RIVN13.465-0.075%
CYD28.040-0.12%
HMC33.2900.635%
TM188.7003.98%
CVNA59.030-0.48%
PAG193.440-1.23%
LAD286.445-0.005%
AN154.050-1.39%
GPI229.6900.05%
ABG163.275-0.655%
SAH60.9000.09%

California launches new EV rebates after federal tax credits end

The state will offer rebates of up to $3,500 on new EVs and $1,750 on used models as it looks to sustain EV demand.

California launches new EV rebates after federal tax credits end

On the Dash:

  • California is introducing new state incentives to help offset the loss of federal EV tax credits.
  • Dealers should watch for participating brands as the rebate program launches later this summer.
  • The program could help support EV demand in California despite a broader slowdown in U.S. electric vehicle sales.

California Governor Gavin Newsom has signed legislation to establish a new state electric vehicle (EV) rebate program to offset the reduction in federal EV tax credits.

Starting later this summer, eligible first-time buyers can receive a $3,500 rebate on new EVs priced up to $50,000. Additionally, buyers of used EVs can qualify for a $1,750 rebate on vehicles priced up to $25,000. This $270 million program is funded through California’s state budget and contributions from participating automakers.

Sign up for CBT News’ daily newsletter and get the latest industry stories delivered straight to your inbox.

These rebates come in response to the elimination of the federal tax credit, which offered $7,500 for new EVs and $4,000 for used EVs, a change enacted by President Donald Trump last year. California officials state that these new incentives are intended to help maintain EV affordability and encourage their adoption.

The California Air Resources Board is expected to announce which automakers will participate in the program next month.

California’s EV market

Despite a recent slowdown in U.S. EV sales due to the loss of federal incentives, second-quarter sales improved from the previous quarter, likely influenced by rising gasoline prices. According to the International Energy Agency, EVs accounted for 7.8% of new vehicle sales in the U.S. in 2025, down slightly from 8.1% in 2024.

California remains the largest EV market in the nation, with EVs comprising approximately 20% of new vehicle sales last year, nearly half of which were from Tesla. Notably, Governor Newsom has criticized the Trump administration’s rollback of federal EV incentives and has reiterated California’s commitment to supporting electric vehicle adoption.

Moreover, the state is currently challenging the administration’s repeal of California’s 2035 gasoline vehicle phaseout regulations through ongoing litigation. The administration has also relaxed some other EV regulations, which are expected to reduce compliance costs for automakers.

California’s new rebate program aims to sustain EV demand even amid reduced federal support. However, its effectiveness will depend on the participation of automakers as well as consumer response once the incentives become available later this summer.

More from EVs & Technology
U.S. EV sales rise 7.7% in Q3 as market rebounds

U.S. EV sales rise 7.7% in Q3 as market rebounds

- October 13, 2026
On the Dash: U.S. EV sales rose 7.7% from Q2 to 266,630 vehicles, and EVs captured 6.5% of new-vehicle sales, up from 5.8% in the previous quarter. Toyota and Lexus...
Honda targets 2027 for wireless in-motion EV charging tests

Honda targets 2027 for wireless in-motion EV charging tests

- October 9, 2026
On the Dash: Honda and its partners plan to begin demonstration testing of wireless in-motion EV charging in April 2027. The system is designed to deliver up to 150 kW...
automakers

Can American automakers navigate tariffs, EVs, and autonomy?

- October 9, 2026
Welcome back to the latest episode of The Future of Automotive on CBT News, where we put recent automotive and mobility news into the context of the broader themes impacting...
Polestar Q3 sales rise 1% as Polestar 5 deliveries begin

Polestar Q3 sales rise 1% as Polestar 5 deliveries begin

- October 8, 2026
On the Dash: Polestar estimates Q3 retail sales at 14,371, up 1% year over year, with nine-month sales reaching 44,790. Sales excluding the U.S. fell 8% in Q3 and 0.5%...
CBT News
Privacy Overview

This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.