California Launches $135M EV Rebate Program with Up to $3,500 Instant Discount

California has introduced a state-level alternative subsidy program ahead of the expiration of the federal electric vehicle (EV) purchase tax credit in 2025. The state government has allocated $135 million in its new fiscal year budget to support incentives for purchasing both new and used EVs, with automakers providing matching funds that will double the total available subsidies. Under Senate Bill 168 (SB 168), eligible buyers of new EVs can receive a $3,500 rebate, while those purchasing used EVs can receive $1,750. These rebates will be applied as instant discounts at the point of sale, eliminating the need for post-purchase tax refund applications. The subsidies come with price and eligibility restrictions: the manufacturer’s suggested retail price (MSRP) for new vehicles must not exceed $50,000, and the sale price for used vehicles must not exceed $25,000. However, California-based automakers—such as Lucid and Rivian—are exempt from these price caps. Additionally, the incentives are limited to first-time EV buyers, who must sign a declaration confirming they have never previously owned a zero-emission vehicle.