California Steps In After Federal EV Tax Credit Cuts
After the federal government decided to eliminate the electric vehicle (EV) tax credit, California swiftly introduced its own initiative.
This month, Governor Gavin Newsom launched a program called MyFirstEV, which offers first-time zero-emission vehicle buyers a $3,500 discount on new vehicles and $1,750 off used ones directly at the point of sale.
Critics have pointed out that, under this program, individuals who aren’t looking to buy an EV are essentially subsidizing those who are. Moreover, MyFirstEV does not seem to prioritize assistance for people who might struggle to afford these vehicles.
Californians have taken note. Tesla reported that its share of MyFirstEV funds ran out almost instantly, with buyers needing to have placed their orders between August 3 and August 7 to qualify. The funds were exhausted in just a few days.
Federal vs. State Approach
For years, the federal government incentivized electric vehicle purchases through a tax credit of up to $7,500. Recently, Congress moved to abolish this credit, applying to vehicles purchased after September 30, 2025. California responded by essentially creating its own alternative.
The state has set aside $135.5 million for MyFirstEV, which will be matched dollar for dollar by participating automakers, resulting in a total allocation of $271 million for first-time zero-emission vehicle buyers. When it comes to new vehicles, California contributes $1,750, with an equal amount from manufacturers. Used vehicles can also receive $1,750, with the same split.
While automakers can choose to participate, it’s noteworthy that many are investing their own funds to keep these incentives alive.
They have already committed significant resources to the transition to electric vehicles, spending billions on battery production and redesigning manufacturing lines for new electric models. Consumers, however, haven’t always kept pace with these expectations. With the federal subsidy gone, California is stepping in to bridge the gap.
Program Details
A deeper look into MyFirstEV reveals some interesting rules. The program is limited to residents buying or leasing their first zero-emission vehicle. So, if you already own an EV or have a charging station installed, you’re not eligible for this benefit. But, interestingly, anyone purchasing their first EV can qualify regardless of their income level.
New vehicles typically have to have a price of $50,000 or less, while used cars must be priced at $25,000 or lower through certified programs. Yet, reports indicate that automakers based in California might not face the same price restrictions.
Expanding Support for EVs
California isn’t just stopping with vehicle rebates. On August 18, Governor Newsom announced an additional $95.2 million to boost charging and hydrogen fueling infrastructure statewide, reinforcing the push for zero-emission transportation.
This leads to an important question: If electric vehicles are indeed ready to compete in the market, why do taxpayers need to subsidize their purchases?
I’m not against EVs. If they fit your needs, great—go for it! They can be quiet, quick, and economical under the right conditions. If you’re interested in hybrids, or if a gasoline engine fits your lifestyle better, then that’s perfectly valid too.
Let’s provide consumers with choices and allow them to decide for themselves.
The current system allows individuals who have no intent of buying an EV to fund those who do participate in MyFirstEV, and it seems unfair that this support isn’t specifically prioritized for those who genuinely need it.
Supporters might point to the rapid response from buyers as evidence of the program’s success—the allocation for Tesla was used up in just a matter of days. But, I can’t help but wonder: If there was such a rush to claim the funds, why did the buyers need that subsidy in the first place?
What we see is California’s proactive approach after the federal government pulled back on EV incentives. Californians now have to reflect on whether this is how they truly want their government to function.
The federal EV subsidy might be a thing of the past, but in California, taxpayers are still shouldering the burden.
