Asger Risom
California is preparing a new push to keep electric-car sales moving amid shrinking federal support.
Fresh details outline who qualifies, how the money would work, and why the state is narrowing its focus.
California has unveiled more information about a proposed $200 million electric-vehicle incentive program aimed at sustaining EV adoption as federal support declines.
The plan, backed by Governor Gavin Newsom, would use state funds to encourage cleaner transportation while introducing new limits designed to stretch the money further.
Filling the gap
State officials say the program is intended to offset the impact of reduced federal incentives for electric vehicles. If approved, the funding would apply to both new and used EVs sold or leased in California.
One of the program’s defining features is a requirement that automakers match the state’s contribution dollar for dollar, effectively doubling the value of each incentive at the point of sale.
California Air Resources Board (CARB) officials say the rebates would be applied immediately, reducing upfront costs rather than relying on delayed tax credits.
Who qualifies
Only first-time EV buyers would be eligible for the incentives. That restriction is a deliberate choice, according to state regulators.
“Limiting eligibility to first-time ZEV buyers helps expand the market by introducing new consumers to ZEV technology,” a CARB spokesperson told InsideEVs in an email. “Research shows that once consumers make the switch to ZEVs, they typically don’t go back to dirty gasoline or diesel vehicles.”
The state argues that targeting new buyers could accelerate broader adoption rather than subsidising repeat purchases by existing EV owners.
Limits and numbers
The proposal would also impose vehicle price caps similar to those in the original Inflation Reduction Act: $55,000 for cars and crossovers, and $80,000 for trucks and SUVs.
California has not yet disclosed a final per-vehicle rebate amount. If the state attempted to fully replace the former $7,500 federal tax credit, $200 million would cover fewer than 27,000 vehicles, a fraction of annual EV sales.
More than 408,000 EVs, plug-in hybrids and hydrogen-powered vehicles were sold in California in 2025, underscoring the scale of the challenge.
Still a proposal
The program has not yet been finalised and still requires approval from the state legislature. Key details, including exact incentive levels and eligibility rules, remain subject to change.
Even so, the framework suggests a more targeted approach than past incentives, combining price caps, point-of-sale rebates and a focus on first-time buyers to maximise impact.
Sources: InsideEVs, California Air Resources Board
