California is introducing a new incentive program aimed at making electric vehicles more affordable for first-time buyers, offering instant rebates of up to $3,500 on eligible new EVs and $1,750 on qualifying used electric vehicles.
Governor Gavin Newsom signed the legislation creating the program, known as MyFirstEV, which is scheduled to launch later this summer. The initiative comes as the U.S. electric vehicle market adjusts to the end of federal EV tax credits and slowing nationwide sales.
Up to $3,500 Off Eligible New Electric Vehicles
The MyFirstEV program will provide point-of-sale rebates, allowing eligible buyers to receive the discount immediately at participating dealerships rather than waiting to claim a tax credit later.
Under the program:
– First-time EV buyers purchasing a new electric vehicle with a manufacturer’s suggested retail price (MSRP) of $50,000 or less will qualify for a $3,500 rebate.
– Buyers choosing a used electric vehicle priced at $25,000 or less will receive a $1,750 rebate.
California has allocated $135.5 million through the state’s 2026-27 budget, while participating automakers will contribute matching funds, bringing the total incentive pool to $270 million. State officials have not yet announced which automakers will participate, but the California Air Resources Board expects to release that information before the program begins.
A Response to the End of Federal EV Tax Credits
The new state incentive follows the elimination of the federal EV tax credit program after legislation signed by President Donald Trump last year ended the $7,500 tax credit for new electric vehicles and the $4,000 credit for eligible used EVs.
California officials say the MyFirstEV program is designed to offset the impact of those policy changes, improve EV affordability, and continue supporting the state’s clean transportation goals while strengthening domestic manufacturing and employment.
Announcing the program, Governor Newsom criticized the federal rollback of EV incentives, arguing that California would continue investing in clean transportation despite changes in Washington.
The MyFirstEV initiative is one component of California’s broader $600 million clean transportation package.
California Continues to Lead U.S. EV Adoption
California remains the nation’s largest electric vehicle market. Zero-emission vehicles accounted for approximately 20% of new vehicle sales in the state last year, with Tesla representing nearly half of those registrations.
The state also recently surpassed 2.5 million cumulative zero-emission vehicle sales, significantly exceeding its original target of 1.5 million by 2025.
Supporting that growth is one of the country’s largest charging networks. California now has more than 200,000 public and shared charging points, along with an estimated 800,000 home chargers installed across the state.
EV Sales Face Headwinds Despite Global Growth
While California continues to expand EV incentives, the broader U.S. market has experienced slower growth following changes to federal policy.
According to the International Energy Agency, electric vehicles represented one in four new cars sold worldwide in 2025, highlighting continued global momentum. In contrast, EVs accounted for 7.8% of new vehicle sales in the United States last year, down slightly from 8.1% in 2024.
Although higher gasoline prices helped boost U.S. EV sales during the second quarter compared with the previous three months, overall demand remains below the pace seen in earlier years.
California previously operated one of the nation’s largest EV incentive programs, distributing $1.49 billion in rebates that supported approximately 586,000 electric vehicle purchases before the program concluded in 2023.
With the launch of MyFirstEV, the state is once again using direct purchase incentives to encourage EV adoption, aiming to make electric vehicles more accessible for first-time buyers while maintaining California’s leadership in the transition to zero-emission transportation.
