California launches 'My First EV' rebates to offset loss of federal incentives
Governor Gavin Newsom introduces state-funded rebates for first-time buyers as federal EV tax credits vanish.
California has launched the 'My First EV' program to provide financial rebates to first-time electric vehicle buyers across the state. The initiative is designed to maintain the momentum of clean energy adoption following the elimination of federal EV incentives by the Trump administration.
The program offers a $3,500 rebate for first-time buyers of new electric vehicles with a sticker price under $50,000. For those opting for pre-owned vehicles, the program provides $1,750 for used EVs priced under $25,000, provided they are purchased through manufacturer pre-owned programs. Notably, the price caps do not apply to EV companies headquartered in California, meaning all vehicles from Lucid and Rivian qualify for the incentives regardless of price.
A State-Level Response to Federal Shifts
The launch comes amid a deepening political conflict between Sacramento and Washington. The Trump administration and Republicans in Congress recently eliminated federal EV tax credits, which previously offered up to $7,500 for new vehicles and $4,000 for used ones. Additionally, the federal government revoked the waiver that allowed California to ban the sale of new gasoline-powered passenger vehicles by 2035.
These policy shifts have had a measurable impact on the local market. EV sales in California dropped from 22.9% of new car sales in 2025 to 17.5% so far in 2026. While sales have recently begun to rebound—driven largely by rising oil prices—the state is moving to solidify demand through direct subsidies.
Funding and Industry Impact
The 'My First EV' program is funded by a $135 million allocation from state lawmakers, which is matched by 13 participating automakers. State officials estimate the total funding will cover approximately 73,000 vehicle sales.
By splitting the costs between the public sector and the private industry, California is attempting to keep EVs affordable for a broader demographic of buyers. This strategy is seen as a critical move to combat global competition, particularly from low-cost Chinese EV manufacturers, while upholding state environmental mandates in the absence of federal support. Governor Gavin Newsom framed the move as a necessary alternative to federal policy, stating that while Donald Trump is "hellbent on burning more expensive fossil fuels and raising costs for Americans," California is demonstrating a "better way."
Looking Ahead
Industry observers will be watching the speed of adoption to see if the program can fully offset the loss of federal credits. According to the Daily Bulletin, there are indications that rebate funds could be exhausted by the end of the year based on current sales rates. Whether the state will seek additional funding or expand the partnership with automakers remains to be seen.