California offering $3,500 EV rebates to first-time buyers

By David Shepardson

WASHINGTON, July 13 (Reuters) - ‌California Governor Gavin ​Newsom ​signed legislation on Monday creating state rebates of $3,500 on new electric vehicles for first-time buyers later this summer as U.S. sales have slowed.

The $270 ‌million rebate program for California residents is funded by the state budget ⁠and automakers. It applies to new vehicles with a suggested retail price of up to $50,000. It ‌also includes a separate $1,750 rebate ‌for used EVs costing up to $25,000.

President Donald Trump signed legislation last year that killed the federal $7,500 EV tax credit and a $4,000 used EV credit, which has reduced ​U.S. sales.

The state did not immediately disclose which automakers are participating. The California Air Resources Board said it hoped to be able to disclose the ⁠participating automakers next month.

The International Energy Agency said 1 in 4 new cars purchased worldwide in 2025 was an ​EV, compared to 7.8% of vehicles in the U.S. last year, which was down from 8.1% in 2024. EV sales rose in ​the second quarter over the prior three months ‌on higher gas prices but are still below prior years.

EVs accounted for about 20% of new car sales in California last ⁠year and Tesla was almost 50% of the total.

"Donald Trump is doing everything in his power to pollute our air and surrender the clean car industry to China on a silver ⁠platter. California is putting its foot on the accelerator," Newsom said in a statement.

The White House ​did not immediately comment.

California's previous rebate program ended in 2023 and spent $1.49 billion to subsidize 586,000 EV purchases over a decade.

Trump has taken aim at EVs on a number of fronts ‌including signing legislation in June 2025 against California's rules adopted by nearly a dozen other states that aim to phase out ‌new gasoline-powered cars by 2035. California has sued to challenge the procedure used to reverse ⁠the landmark EV rules.

The administration is ‌making other changes that will ​save automakers billions of dollars in purchasing credits from Tesla and others to meet prior regulatory requirements.

(Reporting by David Shepardson; Editing by ‌Mark Porter)

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