CALIFORNIA — Governor Gavin Newsom announced Jan. 9 that California is seeking $200 million in state funding to create a new electric vehicle (EV) rebate program after the federal EV tax credit expired last year.
The proposal is part of California’s 2026–2027 state budget plan and aims to help residents afford zero-emission vehicles through new point-of-sale rebates.
Under the federal One Big Beautiful Bill Act, the $7,500 tax credit for new EVs and the $4,000 credit for used EVs expired Sept. 30, 2025, leaving buyers without a major incentive to purchase zero-emission vehicles.
According to Reuters, EV sales fell sharply in the final three months of 2024 after the federal tax credit expired on September 30.
On Friday, Chrysler-parent Stellantis said it will stop selling its plug‑in hybrid electric Jeep Wrangler and Grand Cherokee in North America. Meanwhile, General Motors said Thursday it would take a $6 billion charge to unwind some electric-vehicle investments.
Details yet to be finalized
Details for the new program such as rebate amounts, eligibility rules, and income limits have yet to be finalized.
California Air Resources Board (CARB) is expected to administer the program and would provide direct discounts to buyers at the time of purchase.
California has long aimed to reduce emissions and transition away from gasoline vehicles as a leader in clean transportation.
Prior to the federal changes, California operated the Clean Vehicle Rebate Program, which distributed nearly $1.5 billion in rebates and helped incentivize more than 586,000 vehicles between 2013 and 2023.
The proposed funding will require approval from the California Legislature.
Lawmakers will consider the measure alongside other priorities including healthcare, education, wildfire resilience, and clean energy investments.
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