California's $3,500 EV Rebate Program Starts 'Later This Summer'

The program, which applies to new and used EVs, fills some of the gap left behind by the now-dead $7,500 EV tax credit.

2027 Rivian R2: First Drive On- and Off-Road

Photo by: Mack Hogan/InsideEVs

Tim Levin

By: Tim Levin

Jul 13, at 6:58pm ET

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California's $3,500 EV rebate program is almost here.
The new incentive will become available "later this summer," the California Governor's office said on Monday.
It's an on-the-hood rebate for new EVs costing up to $50,000 and used ones costing up to $25,000.

The federal government may be no friend of electric vehicles, but states are stepping up with their own policies to keep sales rolling. On Monday, California Governor Gavin Newsom signed into law a new EV incentive program that will—at least partially—make up for the end of the $7,500 EV tax credit.

We reported on this a couple of weeks ago when California's new budget bill was still making its way through the state legislature. Now Governor Newsom has signed SB 168, the law that outlines the new incentive, so it's official. When will it go into effect? Personally, I'd love to know. I have a gas Subaru that works fine, but I've been eyeing my local Hyundai Ioniq 5s and Tesla Model 3 Highlands with particular envy lately. A little cash on the hood could help make that case for me.

On Monday, the Governor's office said the incentive will come into play "later this summer." I reached out to the California Air Resources Board, which will design and administer the program, for specifics. A spokesperson said they don't have more to share on the timeline, and that an announcement of the participating automakers should happen next month.

That will be important too, because car companies are ponying up half the money for the program. California has allocated $135.5 million, and auto companies will match that, bringing the total funding to around $270 million.

New EVs with an MSRP of up to $50,000 will qualify for a $3,500 credit. There is also an incentive for used EVs of $1,750, which applies to vehicles sold for $25,000 or less. (Why manufacturers would pay to incentivize used vehicle purchases—which they typically do not profit from—is not clear.)

It wasn't immediately clear how exactly the automaker matching would work. Importantly, the cash will be available as an upfront discount, rather than a tax credit you have to apply for later.

2026 Tesla Model 3 Standard

The new California incentive for used EVs has me looking at Tesla Model 3s.

Photo by: Tesla

The amounts are a little less than half of what you could get via the now-dead federal program. That was a little different, however, in that it also enforced income caps and special rules meant to prioritize U.S.-made cars with domestic battery components. You'll probably recall that lots of cars didn't qualify for exactly that reason.

The California law isn't nearly so rigid. But the state is giving a helping hand to local companies. Any EV manufacturer headquartered in California is exempt from the price caps. That could help Rivian sell a few more $80,000 R1Ts, or help Lucid move some more $70,000 Airs. (Both could use the help, seeing as getting an EV startup off the ground is all about scale. But Lucid especially so.) Tesla could have benefitted too, but it moved its headquarters to Texas from California a few years ago.

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There's another wrinkle in the California incentive that EV advocates say could help the funding go a little farther. It's only for first-time EV buyers. California has one of the highest rates of EV ownership in the country, and surveys show that people who go electric tend to get hooked. (Just look at what happened with Editor-in-Chief Mack Hogan and his Chevy Blazer EV.)

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But there also have to be plenty of California residents like me—drivers who see all the great EVs around them and have just been waiting for the right time to pounce. Unfortunately for them, and for me, last September was the best time to make a move. (Frankly, I regret that I didn't.) But later this summer when the California program takes effect may be a close second. As soon as we learn more about it, we'll let you know.

Contact the author: Tim.Levin@InsideEVs.com

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