The proposal aims to cut upfront EV purchase costs, though incentive levels remain undecided and vehicles will be subject to price caps.
California is proposing a $200 million electric vehicle incentive programme limited to first time buyers and requiring participating automakers to provide matching incentives, the administration of Governor Gavin Newsom said. The plan is aimed at supporting EV demand after recent federal policy changes and a sharp slowdown in sales.
Under the proposal, incentives would help offset the upfront cost of new or used electric vehicles, though the size of the rebates has not yet been disclosed. Eligible vehicles would be subject to price caps adopted by Congress in 2022. The programme follows the end of federal tax credits worth up to $7,500 for new EVs and $4,000 for used models, which expired on 30 September. EV sales fell markedly in the final quarter of 2024 after the incentives lapsed.
Newsom said late in 2025 that California would consider reviving a version of its Clean Vehicle Rebate Programme, which ended in 2023 after distributing $1.49 billion in subsidies over a decade. The governor has positioned the state as a counterweight to federal efforts to roll back EV policies under President Donald Trump.
The proposal comes as automakers face weakening EV demand and rising costs. Stellantis recently said it would halt sales of its plug-in hybrid Jeep Wrangler and Grand Cherokee in North America, while General Motors disclosed a $6 billion charge linked to scaling back EV investments.
Trump has moved to ease regulatory pressure on automakers, including blocking California’s EV sales mandates and removing penalties tied to past fuel efficiency rules. GM said recent federal rollbacks could save the company up to $750 million.
