California is launching a new rebate program aimed at boosting electric vehicle (EV) sales amid persistently high gasoline prices driven in part by geopolitical tensions in the Middle East. Starting next month, the MyFirstEV instant rebate program will provide qualifying California residents with up to $3,500 off the purchase price of a new electric vehicle and $1,750 off a used model. This initiative, backed by $135 million in state funding and matched by contributions from 13 major automakers, is designed to encourage the adoption of zero-emission vehicles by making them more affordable for first-time EV buyers.
California has maintained a leadership role in EV adoption, with electric and plug-in hybrid vehicles comprising 19.1% of new car sales during the second quarter of 2024. Between April and June, Californians purchased nearly 87,000 zero-emission vehicles, including more than 75,000 fully electric cars, over 11,000 plug-in hybrids, and a small number of hydrogen fuel-cell vehicles. This represents a 3.3 percentage point increase compared to the first quarter and the highest share of EV sales recorded in the state since the federal tax credit of $7,500 for new EVs was eliminated during the Trump administration in September 2023.
Experts attribute the recent uptick in EV purchases partly to the sharp rise in California gas prices, which have exceeded $5.70 per gallon, well above the national average. Gil Tal, director of the Electric Vehicle Research Center at UC Davis, noted that high fuel costs alter the ownership cost calculation, making EVs more attractive to consumers. Governor Gavin Newsom cited the volatility of gas prices driven by the ongoing conflict involving the U.S., Israel, and Iran as a key factor motivating Californians to switch to cleaner transportation options.
Despite the program’s goals, challenges remain. Low inventories of electric vehicles nationwide continue to present a hurdle to rapid adoption. According to Tal, the absence of federal policies promoting EV supply, including the revocation of California’s clean-car waiver that previously pressured automakers to prioritize zero-emission vehicle sales, has contributed to limited availability in dealerships. This regulatory rollback, combined with manufacturers scaling back EV production plans, has constrained the market.
Academic observers emphasize that incentives like MyFirstEV help address both affordability and equity concerns. Jeremy Michalek, director of the Vehicle Electrification Group at Carnegie Mellon University, highlighted that discounts on used EVs could enable lower- and moderate-income buyers to enter the market. However, he also pointed out that rebates on used vehicles do not directly stimulate new EV production, but rather encourage the transfer of existing vehicles.
The MyFirstEV rebate program applies to new electric vehicles priced at $50,000 or less, and to used EVs listed at $25,000 or less through manufacturer-certified preowned programs. An exception allows cars from California-based manufacturers such as Lucid and Rivian to qualify for the discount regardless of price, supporting local automakers.
As California continues to navigate energy, economic, and policy challenges, the MyFirstEV program represents the state’s latest effort to accelerate the transition toward cleaner transportation and reduce dependence on fossil fuels.