California Governor Gavin Newsom is once again pulling on his favorite superhero cape to rescue the electric vehicle market, launching a direct, $270 million counteroffensive against Washington’s war on green transit.
Under the newly signed SB-168 legislation, the Golden State is resurrecting rebates of $3,500 for first-time EV buyers and $1,750 for used plug-ins. It is a loud, proud rebuke of the Trump administration’s decision to murder the federal $7,500 EV tax credit.
Newsom framed it with typical cinematic flair, accusing the federal government of trying to “surrender the clean car industry to China on a silver platter” while declaring that California is “putting its foot on the accelerator”.
But as always in the high-stakes automotive theater, the devil, and the math, is in the details. The brand-new SB-168 program comes with a strictly enforced $50,000 price ceiling for new vehicles and $25,000 for used ones. Contrast this with the deceased federal credit, which generously covered trucks and SUVs up to $80,000 and cars up to $55,000. Now consider that the average new vehicle transaction price stubbornly marched past the $50,000 milestone in 2025, with EVs still commanding a steep premium over internal combustion engines.
In other words, California is offering you a discount on cheap EVs that barely exist, targeting a mass market that manufacturers are struggling to supply profitably, all while trying to fend off Chinese competition that is legally barred from entering the country anyway.
While the state is chipping in, a significant portion of this $270 million pot is being bankrolled by “unnamed automakers”. The California Air Resources Board (CARB) has promised to reveal these mystery benefactors next month, leaving us with a delightful corporate cliffhanger.
California is betting its massive market footprint will force the industry’s hand. Along with states that mimic its rules, California controls over a third of the US auto market. This rebate is part of a broader, three-pronged legal and regulatory trench warfare that includes a 72nd lawsuit against the administration over Clean Air Act waivers and a CARB “backstop” plan to keep 2025 emissions standards alive.
