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The $7500 federal EV tax credit was axed last year, but California car buyers can still save significant money when they buy their first EV due to a new bill that was signed today by Governor Gavin Newsom.
The bill, which is part of a larger clean-air initiative in California, cemented a $3500 discount on new EVs with an MSRP up to $50,000. People who are buying a used EV can get in on the action too, receiving a $1750 discount on models that sell for $25,000 or less.
Andi Hedrick|Car and Driver
California-based companies are exempt from that $50,000 cap, though, so if you've had your eyes on a Lucid or Rivian (all models from both currently start above $50K), it could be time to pull the trigger on a luxury electric ride from your home state.
Though it's clear the law was made with Irvine-based Rivian and Bay Area-based Lucid in mind, it's unclear what other automakers are in on the deal. Tesla, which started in the Bay Area and has since moved its headquarters to Austin, Texas, will not be included in the price-cap exception. While that takes the base Cybertruck out of the running, several Model 3 and Model Y trims start under $50,000, so they should qualify.
Andi Hedrick|Car and Driver
Of course, that's if Tesla and other automakers play ball. The law restricts these deals to cars from "participating automakers," which are currently unknown. The California Air Resources Board (CARB) says it hopes to release the list of participating automakers next month, and the point-of-sale discount is supposed to go into effect later this summer.
California set aside $135.5 million for the initiative from its 2026–2027 state budget, and participating automakers are matching the investment to create a pool of $270 million for first-time EV owners. Depending on which companies sign on, this could put up several EVs at an appealing sub-$35,000 price point, effectively tripling the options already available within that range.
If GM signs on, the highly affordable Chevy Bolt could cost as little as $25,495. Should Nissan participate, the Leaf would come in at just over $28,000. That's typically where the sub-$35K list ends, but the new law could bring cars from Tesla, Ford, Subaru, and Toyota into the mix for Californians.
Marc Urbano|Car and Driver
James Lipman|Car and Driver
The $3500 discount probably won't be more than a drop in the bucket when paying for a Lucid Air Sapphire, but the brand's fans could be able to get their hands on the least expensive model—an Air Pure—for just $68,900, which is down from its $72,400 initial ask. And for buyers looking for other EVs that cost $50,000 or less, this might be the motivation they need to transition into the lifestyle at a more affordable rate.
The California bill states that the discount will be applied to the vehicle price at the dealer, meaning there's no extra paperwork or rebate instructions to get the deal. While there's not yet an official timeline for when the discounts will take effect, Newsom's office says we can expect to see them roll out later this summer.
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Alayna Wilkening grew up reading motorsport magazines and following her grandpa around his Chevrolet dealership's showroom floor. In true Hoosier fashion, her first car was a hot pink custom cardboard "Fiero-vette" for her kindergarten Kindy 500 race. She now autocrosses a 1994 Miata with her dad, which she learned to drive the night before her first event. Alayna went to Indiana University and graduated with a degree in journalism and a minor in graphic design. As a testament to her great taste in cars, her first real one was a metallic orange 2007 Chevy HHR, which she lovingly called "The Dumptruck."