California has issued nearly 12,000 rebates to first-time electric vehicle (EV) buyers since launching its $3,750 “MyFirstEV” instant rebate program in August, aiming to offset the loss of the federal $7,500 EV tax credit eliminated in September 2025. The state’s initiative is intended to maintain momentum in EV adoption amid rising gasoline prices and shifting federal policies.
Governor Gavin Newsom emphasized the significance of the program, noting it has helped thousands of Californians make the transition to electric cars while promoting economic security and domestic job growth. “California is just getting started,” he said, highlighting the state’s commitment to supporting EV ownership despite setbacks at the federal level.
California’s move comes as electric vehicles made up 6.4% of all new U.S. car sales in the third quarter of 2026, up from 5.8% in the previous quarter, according to Cox Automotive. Gas prices averaged $4.29 per gallon on Oct. 19, 2026, up from $3.03 a year earlier, which analysts say has contributed to increased interest in EVs. Stephanie Valdez Streaty, director of Industry Insights at Cox Automotive, indicated that elevated fuel costs and increased availability of appealing EV models are driving renewed consumer demand following the expiration of the federal tax credit.
California accounts for a significant share of EV adoption nationally, with electric and hybrid vehicles constituting over 21% of new light-duty vehicle registrations in the state during the second quarter of 2026—making it the only state to surpass a 20% market share. Lauren Sanchez, chairwoman of the California Air Resources Board, explained that California is stepping in to provide incentives because the global market continues shifting toward zero-emission vehicles despite reduced federal backing.
The state’s rebate program is designed specifically for first-time EV buyers who are California residents. Rebates are available on new EVs priced below $50,000 and used EVs under $25,000, with used car buyers eligible for a smaller rebate of $1,750. There is no price cap on rebates for vehicles made by companies headquartered in California, benefiting manufacturers such as Rivian and Lucid. Tesla, once headquartered in California but now based in Texas, does not qualify for this exemption.
California’s policy contrasts with federal incentives, which previously provided up to $4,000 for used EVs under a 2022 provision introduced during the Biden administration. The state program’s residency requirement means that only those with a California address can claim rebates, potentially limiting benefits for out-of-state buyers.
EV advocacy groups have welcomed California’s efforts as a model for other states. Mike Murphy, CEO of the American EV Jobs Alliance, said the strong early participation shows that price remains a key barrier for many potential EV buyers. He urged other states to adopt similar programs to foster EV demand and support domestic EV manufacturing and supply chains.
As the transition toward electric vehicles accelerates, California’s rebate program serves as an example of subnational efforts to sustain EV growth amid fluctuating federal support and rising fuel costs nationwide.