New California Bill Reduces EV Prices for First-Time Buyers

New California Bill Reduces EV Prices for First-Time Buyers

California has introduced a significant incentive for residents considering an electric vehicle. As noted by Tesla watcher Sawyer Merritt (@SawyerMerritt), Governor Gavin Newsom has signed SB 168, establishing a new point-of-sale rebate program called MyFirstEV that provides first-time zero-emission vehicle buyers in the state with $3,500 off a new electric vehicle.

This initiative follows the Trump administration’s termination of the $7,500 federal EV rebate last fall, which removed a national incentive. The new program carries a total budget of $270 million, funded through state investments paired with matching contributions from automakers.

In an official press release, Governor Newsom stated:

“Donald Trump is doing everything in his power to pollute our air and surrender the clean car industry to China on a silver platter. 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. As California leads the world toward a clean future, our message is clear: no one can stop Californians from choosing vehicles that are better for their wallets and better for the air they breathe.”

How the Instant Rebate Works

The MyFirstEV program is slated to begin later this summer. The discount is applied immediately at the dealership and is available to any Californian purchasing their first zero-emission vehicle, regardless of income. Eligible incentives include:

• $3,500 off new electric vehicles with an MSRP up to $50,000
• $1,750 off used electric vehicles priced up to $25,000

The bill includes a key exception: if an EV manufacturer is headquartered in California as of January 1, 2026, there is no price cap on its vehicles. While Tesla’s engineering headquarters is in Palo Alto, California, its corporate headquarters is in Austin, Texas, so Tesla does not receive the price-limit exemption, even though it produced more than 500,000 vehicles at its Fremont factory last year. Rivian and Lucid, neither of which builds vehicles in the state, do qualify for the exemption, so the rebate applies to all of their models.

Which Tesla Models Qualify?

Despite the $50,000 MSRP ceiling, most of Tesla’s popular models are eligible for the $3,500 point-of-sale reduction.

The Model Y Premium AWD comes in just under the cap, while the Model 3 Performance is ineligible at $54,990. The recently launched long-wheelbase, six-seat Model Y L also does not qualify because it starts at $61,990.

For first-time buyers in California, the program would lower Tesla’s entry price to $33,490 once it takes effect.