California's $3,500 EV Rebate Excludes Tesla, Favors Rivian and Lucid
Get the Energy newsletter
Daily energy & climate — solar, EVs, oil, the policy fights and tech bets shaping the transition. Free.
- Governor Newsom signed SB 168 creating the 'MyFirstEV' program, offering $3,500 instant point-of-sale rebates to first-time EV buyers, backed by $135.5 million in state funds matched dollar-for-dollar by participating automakers.
- The rebate carries a $50,000 MSRP cap for most vehicles, but California-headquartered EV-only automakers are exempt — a carve-out that benefits Rivian (Irvine) and Lucid (Bay Area), whose cheapest models start around $58,000 and $71,000 respectively.
- Tesla no longer qualifies for the headquarters exemption after moving its HQ to Austin in 2021; only its sub-$50,000 Model 3 and Model Y configurations get the rebate, and the Cybertruck is excluded.
- The program also offers $1,750 off used EVs priced up to $25,000, has no income cap, and restricts eligibility to California residents with vehicles under 8,500 pounds curb weight.
- CARB is finalizing agreements with automakers and dealerships, with full program details expected next month and a launch in the coming weeks.
- California's EV market share fell from nearly a quarter of new car sales to 15.7% in Q1 2026, well below the state's 35% target, after Congress repealed the $7,500 federal EV tax credit last September and US EV sales dropped at least 20% in the first half of 2026.
- MyFirstEV is the centerpiece of a broader $600 million zero-emission vehicle package in the 2026-27 state budget, which also funds $150 million for community air protection, $135.5 million for clean trucks and buses, and $130 million for heavy-duty engine replacements.
Why it matters: Tesla still assembles hundreds of thousands of vehicles annually at its Fremont, California factory, yet the rebate's headquarters exemption routes the biggest per-vehicle subsidy to Rivian (built in Illinois) and Lucid (built in Arizona). With California's EV share down roughly 10 percentage points year-over-year and federal incentives gone, two smaller automakers gain a direct price edge over the state's largest EV manufacturer.
