When the federal EV incentives were rolled back last year, sales of electric vehicles spiked and then fell. Though the sales have started to return to the old level, and there are more options than ever, prices are still higher than for gas. The Governor of California promised a response, and now he has delivered. First-time EV buyers in California can get up to $3,500 off a new or used EV, depending on which one they buy. But as with most things, it’s not quite as simple as that.
Incentives Rely On Some Notable Caveats
Governor Newsom Signs EV Incentive BillState of California
California Governor Gavin Newsom signed State Bill 168 into law yesterday. The law creates a new zero-emissions vehicle (ZEV) rebate program to replace the federal system. This will give first-time EV buyers $3,500 off at the dealership, rather than waiting for a tax refund.
The state is contributing $135.5 million to the fund, and participating automakers are adding the same amount. The state government didn’t announce which automakers are participating.
For first-time buyers of new vehicles, there is $3,500 for vehicles with an MSRP up to $50,000. Buy a used ZEV and the state will chip in up $1,750 on vehicles selling for up to $25,000. Expect that to lead to a big cluster of $24,999 EVs, with some moving up in price and others dropping.
There’s a kicker that should be good for a pair of EV manufacturers, and bad for one that is notorious for hating the state. If the company is headquartered in California, the $50,000 maximum no longer applies. That means buyers of Lucid’s Air or Gravity, or the Rivian R1 and R2 series get the incentive no matter the sticker price. Tesla, whose CEO Elon Musk has been outspoken about unfounded accusations of voter fraud in the state and other complaints, moved the company headquarters to Texas in 2021.
Governor Lashes Out At President
Kindel Media/Pexels
Other clean car programs in the most recent California budget include one to help lower-income residents replace older vehicles with newer ones, and more charging stations in lower income areas. There were 2.5 million EVs sold in the state as of January this year, passing the goal of 1.5 million by 2025.
“Donald Trump is doing everything in his power to pollute our air and surrender the clean car industry to China on a silver platter,” said Governor Newsom, who has been in a public fight with the President for some time. “California is putting its foot on the accelerator. With our new instant rebate program for electric vehicles, we’re making it easier for families to drive clean, breathe clean, and keep more money in their pockets.”
There are some other interesting conditions in the bill. Automakers will need to disclose what part of the incentive came from the State. They’re also not allowed to resell any vehicle that received an incentive out of the state for at least four years after the sale. That doesn’t apply to individual buyers or lessees, though it could be a problem if a lessee moves out of state.
CarBuzz Insight – Why This Matters:
Close-up of the Lucid Gravity X front seatLucid
California (and the states using its rules) has had the strictest air pollution controls in the US for decades as a result of the unique climate and airflow characteristics of its largest city.
The state is all-in on EVs, and has been for a long time. This incentive doesn’t fully replace the federal one, but it gets people most of the way there. It could be a lifeline for Lucid and Rivian, but it should be a benefit to the US EV industry as a whole.
