California Offers $3,500 Rebate for New EVs Priced Below $50,000

California will provide a $3,500 rebate to first-time buyers of new battery-powered vehicles priced below $50,000. Half of the amount comes from state funds and half from automakers. Used EVs qualify for a $1,750 rebate under the same program.

The $50,000 price cap is waived for vehicles made by California-based companies Rivian and Lucid. Rivian’s cheapest model costs $58,000 and Lucid’s costs $71,000. Tesla models do not qualify because the company relocated to Texas in 2021.

A state budget effective July 1, 2026, allocates $135.5 million for the incentives. The program is scheduled to launch in the coming weeks, with details to be released next month, said John Swanton of the California Air Resources Board. EV sales in the U.S.

Have plunged since the Trump administration eliminated the $7,500 federal rebate last year. California residents buy about one-third of EVs sold in the country. Sales in the first half of 2026 are down at least 20 percent from the first half of 2025, according to Cox Automotive.

In the first quarter of 2026, EV market share in California fell to 15.7 percent from nearly 25 percent a year earlier. The state’s target for 2026 is 35 percent. General Motors offers three qualifying EVs below $50,000: the Blazer SUV, Equinox crossover, and Bolt hatchback starting under $30,000.

Toyota offers two small crossovers starting under $40,000. Hyundai’s Ioniq 5 starts at $35,000 and Ford’s Mach-E at about $38,000. Lower-priced versions of Tesla’s Model 3 and Model Y also qualify. Ford plans to launch a $30,000 electric pickup in 2027.

Startup Slate will launch an electric pickup with a $25,000 base price the same year. Loren McDonald, CEO of Chargeonomics, questioned the program’s impact. “If automakers are already doing a $2,500 or $3,500 incentive because they want these things to move, this may not end up impacting buyers much,” he said.

GM, Ford, and Hyundai did not immediately respond to requests for comment.