How California's new $3,500 first-time EV rebate works

California is rolling out a new incentive this summer that knocks $3,500 off the price of a first electric car, applied instantly at the dealership rather than paid back later. Called MyFirstEV, it is the state's answer to the loss of the federal EV tax credit, and it comes with a twist that favors California-based automakers.

Camila Reyes July 18, 2026 at 9:50 AM

With the federal tax break for electric cars gone, California is stepping in with an incentive of its own. Here is how the new program works and who can use it.

What it is

The program, called MyFirstEV, was created under a bill Gov. Gavin Newsom signed on July 13, and the state says it will launch later this summer. It puts $135.5 million in state money on the table, matched dollar-for-dollar by 13 participating automakers. The idea is to lower the up-front cost of a first electric vehicle at a moment when EV sales in California have slumped since Congress repealed the federal EV tax credit.

How much you get

The rebate is $3,500 off a new electric vehicle with a sticker price up to $50,000, or $1,750 off a used one priced up to $25,000. Crucially, the money comes off at the point of sale: rather than applying and waiting months for a check, buyers see the discount on the price at the dealership, as LAist explains. The dealer handles the paperwork.

Who qualifies

The rebate is aimed squarely at first-time buyers. To be eligible, you must be a California resident purchasing your first zero-emission vehicle. Notably, the program does not set an income cap, so it is open to buyers regardless of earnings.

The California-carmaker twist

There is a wrinkle that has drawn attention. The $50,000 price ceiling is waived for electric vehicles built by California-headquartered, EV-only automakers, which in practice means Rivian, whose base is in Irvine, and Lucid, based in the Bay Area. Even their cheaper models, which start well above $50,000, still qualify for the full rebate. Tesla, which moved its headquarters to Texas, does not get that exemption, though many of its most popular models fall under the $50,000 cap and so qualify anyway. State officials cast the design as a way to reward companies that keep jobs and headquarters in California; critics see it as tilting the field.

What about the federal credit

For years, a federal tax credit was the big EV incentive. Congress repealed it, which is much of the reason California moved to fill the gap. For now, MyFirstEV is the primary sweetener for California EV buyers, and it works differently from the old federal credit: it is a discount at purchase, not a break at tax time.

The bottom line

If you are a Californian weighing your first electric car, the practical takeaways are simple: the discount is $3,500 on a new EV under $50,000, it applies right at the dealership, there is no income limit, and it is for first-time buyers. The exact launch date and the full list of participating dealers and automakers had not been finalized as of mid-July; the state's clean-vehicle agencies are the place to confirm details before you shop.