California Governor Gavin Newsom has signed legislation introducing new state rebates for electric vehicles, aiming to stimulate sales amid a national slowdown. The program, effective later this summer, offers first-time buyers $3,500 for new EVs.
The $270 million initiative, funded by the state budget and car manufacturers, applies to new vehicles with a suggested retail price of up to $50,000. Additionally, a $1,750 rebate is available for used electric vehicles priced at up to $25,000.
This state-level push comes after legislation signed by President Donald Trump last year eliminated federal EV tax credits, including a $7,500 credit for new electric vehicles and a $4,000 credit for used ones, which contributed to a decline in U.S. EV sales.
The California Air Resources Board anticipates revealing the participating automakers next month, as it did not immediately disclose which automakers are participating.
The International Energy Agency said 1 in 4 new cars purchased worldwide in 2025 was an EV, compared to 7.8 percent of vehicles in the U.S. last year, which was down from 8.1 percent in 2024. EV sales rose in the second quarter over the prior three months on higher gas prices but are still below prior years.
EVs accounted for about 20 percent of new car sales in California last year and Tesla was almost 50 percent of the total.
“Donald Trump is doing everything in his power to pollute our air and surrender the clean car industry to China on a silver platter. California is putting its foot on the accelerator,” Newsom said in a statement.
The White House did not immediately comment.
California’s previous rebate program ended in 2023 and spent $1.49 billion to subsidize 586,000 EV purchases over a decade.
Trump has aimed EVs on several fronts, including signing legislation in June 2025 against California’s rules adopted by nearly a dozen other states that aim to phase out new gasoline-powered cars by 2035. California has sued to challenge the procedure used to reverse the landmark EV rules.
The administration is making other changes that will save automakers billions of dollars in purchasing credits from Tesla and others to meet prior regulatory requirements.
