Nearly a year after the expiration of a $7,500 federal tax incentive for new electric vehicles, California is stepping in to try to motivate buyers to go electric. <\/p>\n
Gov. Gavin Newsom allocated $135 million in his new state budget<\/a> to provide incentives for new and used EVs. Participating automakers will match the funds. <\/p>\n California leads the nation in EV adoption, though the market has taken a hit under the Trump administration. <\/p>\n The state budget \u2014 a more than $350-billion spending plan \u2014 went into effect Wednesday. The EV incentives will take effect in the coming weeks as the California Air Resources Board irons out agreements with dealerships. <\/p>\n Here\u2019s what you need to know. <\/p>\n What are the incentives worth?<\/p>\n Senate Bill 168<\/a> tasked the California Air Resources Board with setting incentive amounts for new and used electric vehicles sold in California. <\/p>\n Eligible buyers will receive $3,500 off for new EVs and $1,750 off for used ones. Unlike the federal tax credits that expired in September, these incentives offer an instant discount and don\u2019t require buyers to apply for credit later. <\/p>\n State funds will cover half of the incentive amount, and auto manufacturers will cover the other half. <\/p>\n The rebates will mean that most eligible buyers will effectively get between 4% and 7% of their money back. <\/p>\n For used EVs<\/a>, \u201cthis incentive helps what\u2019s already a good deal become an even better deal,\u201d said auto analyst Brian Moody. \u201cI think that\u2019s the perfect use of these kinds of dollars.\u201d<\/p>\n What are the rules and exceptions?<\/p>\n The new incentives can\u2019t be used on all electric vehicles \u2014 they apply only to new EVs with a manufacturer\u2019s suggested retail price of $50,000 or less, and used EVs with a sale price of $25,000 or less. <\/p>\n The $50,000 maximum rules out many options on the market, but legislation outlining the incentive program makes a special exception for California-based companies. Buyers purchasing a new or used EV from a company with headquarters in California can claim the discount regardless of the vehicle price. <\/p>\n That\u2019s good news for Lucid, with headquarters in Newark, Calif., and for Irvine-based Rivian. Neither company currently offers new vehicles for less than $50,000. Rivian said it plans to launch<\/a> a $44,990 SUV in 2027.<\/p>\n Who is eligible?<\/p>\n California\u2019s new EV discounts are available only to first-time EV buyers, according to the legislation. <\/p>\n SB 168 says the buyer\u2019s eligibility will be \u201cconfirmed by a buyer attestation\u201d that they have not previously owned a zero-emission vehicle.<\/p>\n The new EV incentive is less than half of the federal incentive that expired nine months ago. Whereas the federal incentive may have been enough to spark interest in a range of buyers, Moody said the lesser amount will probably appeal mainly to people who already have their eye on an EV.<\/p>\n \u201cI think you have to already be considering it, or in the market,\u201d Moody said. \u201cI think that the amount is just right for that.\u201d<\/p>\n What are California\u2019s clean car goals?<\/p>\n The incentives are intended to help California reach its electric vehicle and air quality goals as those targets have been under fire from President Trump. <\/p>\n Shortly after taking office, Trump signed an executive order that revoked California\u2019s authority to set its own EV regulations, which included a goal of having 100% of new vehicle sales in the state be zero-emission by 2035. <\/p>\n California sued the administration in response. The state also has goals, including some that have been in place<\/a> since 2012, that set declining limits on smog-causing pollutants and required automakers to sell increasing percentages of electric and hybrid vehicles through 2025.<\/p>\n In March, the administration filed a new lawsuit<\/a> again trying to block California\u2019s ability to set stricter-than-federal emissions standards for cars.<\/p>\n