California is stepping in with a sizeable financial incentive for drivers looking to go electric. As spotted by Tesla watcher Sawyer Merritt (@SawyerMerritt), California Governor Gavin Newsom has signed SB 168. The bill creates a brand new state point-of-sale rebate program called MyFirstEV, giving first-time zero-emission vehicle buyers in California $3,500 off a new electric vehicle.
This state rebate comes after the Trump administration ended the $7,500 federal EV rebate last fall, which left buyers without a nationwide incentive. The new program features a total budget of $270 million, funded through a combination of state investments and matching automaker contributions.
In an official press release, Governor Newsom took a direct swing at federal policies, stating:
“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. With our new instant rebate program for electric vehicles, we’re making it easier for families to drive clean, breathe clean, and keep more money in their pockets. As California leads the world toward a clean future, our message is clear: no one can stop Californians from choosing vehicles that are better for their wallets and better for the air they breathe.”
How the Instant Rebate Works
The MyFirstEV program is expected to go into effect later this summer. The instant discount is deducted right at the dealership, and it’s open to any Californian buying their first zero-emission vehicle, regardless of their income level. Here’s what you can get:
$3,500 off new electric vehicles with an MSRP up to $50,000
$1,750 off used electric vehicles sold for up to $25,000
One caveat in the bill states that if an EV manufacturer is headquartered in California as of January 1, 2026, there are no price limits on its vehicles. While Tesla's engineering headquarters is in Palo Alto, California, its corporate headquarters is located in Austin, Texas. This means Tesla doesn’t qualify for the price limit exception, despite producing more than 500,000 vehicles at its Fremont factory last year. However, direct competitors like Rivian and Lucid, neither of whom manufactures their vehicles in the state, do qualify for the exception, meaning the rebate applies to all of their vehicles.
Which Tesla Models Qualify?
Even with the $50,000 MSRP limit, most of Tesla’s popular lineup qualifies for the $3,500 point-of-sale discount.
Tesla Model | Original Sticker Price | Price After Rebate |
|---|---|---|
Model 3 RWD | $36,990 | $33,490 |
Model Y RWD | $39,990 | $36,490 |
Model Y AWD | $41,990 | $38,490 |
Model 3 Premium RWD | $42,490 | $38,990 |
Model Y Premium RWD | $45,990 | $42,490 |
Model 3 Premium AWD | $47,490 | $43,990 |
Model Y Premium AWD | $49,990 | $46,490 |
The Model Y Premium AWD squeezes right under the price cap, but the Model 3 Performance misses out with its $54,990 sticker price. The recently launched long-wheelbase, six-seat Model Y L also misses the cut since it starts at $61,990.
For first-time buyers in California, the discount will bring the starting price of a Tesla down to just $33,490 once it goes live. If you’ve been waiting for the right moment to go electric, this summer might be it.
