California is proposing a $200 million electric vehicle incentive program, limiting eligibility to first-time buyers and requiring participating automakers to provide matching funds.
The big picture: The program aims to offset upfront costs for both new and used EVs, though specific incentive amounts have not been announced.
- Eligible vehicles will be subject to price caps set by Congress in 2022.
Driving the news: The initiative follows the lapse of federal EV tax deductions – $7,500 for new vehicles and $4,000 for used EVs – after September 2024, which led to a sharp decline in EV sales during late 2024.
- Governor Gavin Newsom revived the plan after the federal Clean Vehicle Rebate Program ended in 2023, which had previously allocated $1.49 billion for 586,000 vehicles over a decade.
- Automakers are responding to declining EV sales: Stellantis will stop selling its plug-in hybrid Jeep Wrangler and Grand Cherokee, and GM will incur a $6 billion charge to retreat from certain EV investments.
