California has launched a new $3.5 billion initiative to accelerate electric vehicle (EV) adoption, with Governor Gavin Newsom signing Senate Bill 168 on July 13 to establish the MyFirstEV program. The program provides first-time EV buyers with an instant $3,500 rebate at the point of sale, aiming to reverse a sharp decline in EV market share that has fallen below the state’s ambitious targets.
California’s EV market share dropped from nearly 25% in early 2025 to 15.7% in the first quarter of 2026, a decline state officials attribute to the September 2025 repeal of the $7,500 federal EV tax credit. The MyFirstEV program, backed by $135.5 million in state funding, is designed to counter this trend by offering immediate financial incentives to buyers. Automakers have agreed to match the state’s contribution dollar-for-dollar, creating a total consumer savings pool of approximately $270 million.
Program Details and Eligibility
The MyFirstEV program replaces California’s previous Clean Vehicle Rebate Project, which required buyers to apply for rebates after purchase. Under the new system, the $3,500 discount is applied instantly at participating dealerships, eliminating paperwork and delays. The California Air Resources Board (CARB) is finalizing agreements with automakers and dealers, with the program expected to launch in the coming weeks.
A key feature of MyFirstEV is its lack of income restrictions, a shift from California’s earlier rebate programs that prioritized lower-income buyers. Instead, eligibility is determined by vehicle price, with a $50,000 cap for most models. However, the program includes a critical exemption: automakers headquartered in California as of January 1, 2026, and exclusively producing EVs are not subject to the price cap. This rule applies to Rivian, based in Irvine, and Lucid, headquartered in the San Francisco Bay Area, allowing their vehicles—priced from $58,000 and $71,000, respectively—to qualify for the full $3,500 rebate.
Tesla, which relocated its headquarters from Fremont, California, to Austin, Texas, in 2021, does not qualify for the exemption. As a result, only Tesla’s Model 3 and Model Y configurations priced under $50,000 are eligible for the rebate. The Cybertruck and higher-priced Tesla models remain excluded, despite the company’s continued manufacturing presence in Fremont, where it produces hundreds of thousands of vehicles annually.