With new electric vehicle prices averaging nearly $55,000 and the federal government no longer offering $7,500 in tax credits for plug-in vehicles, at least one major automaker is confirming its plans to participate in California’s new $3,500 instant rebate program for new EV buyers in the state.

Rivian, an Irvine, California-based company, confirmed to USA TODAY on Tuesday, July 14 that it plans to participate in California’s EV tax rebate program.

Peebles Squire, a Rivian spokesman, said the company “will be able to share more specifics in the future.”

California’s new EV discounts come from a $135 million pot of state money that is included in a recently announced budget deal reached between California Gov. Gavin Newsom, a Democrat, and leaders in the state’s legislative branch. Additional money for the EV rebate program will come from automaker-funded grants, California officials said.

That means the discounts will only apply to EV models that come from automakers who opt into the program.

Lindsay Buckley, a spokeswoman with the California Air Resources Board, which is administering the $3,500 EV rebate program, said in an email that the agency expects to announce more participating automakers in the next month.

Why Is California Stepping in to Offer EV Tax Rebates?

California’s plan comes nearly two years after President Donald Trump’s 2024 election win, when Newsom pledged he would step in to offer electric vehicle tax credits to consumers if Trump followed through on campaign promises to end the popular $7,500 federal credit. Trump pushed legislation through Congress that ended the federal tax credit on Sept. 30, 2025.

California is home to the largest percentage of car buyers who opt for electric cars.

According to the Alliance for Automotive Innovation, which lobbies in Washington, D.C., for most major automakers, EVs and hybrid cars composed nearly 24% of new light-duty vehicle registrations in California in 2025, the most recent data the group has made publicly available. California was the only state above a 20% market share in 2025.

Carmakers have lamented the loss of the federal incentive for EVs, and several have slashed plans to build future electric models in light of the shift in the federal government’s support for the technology.

California Air Resources Board Chairwoman Lauren Sanchez said in an exclusive interview with USA TODAY in January that her state is stepping up to offer at least some portion of the nation’s EV buyers rebates because “the rest of the global market is moving toward” zero-emission vehicles, despite the backsliding in federal support under Trump.

EV supporters have praised California for stepping in to fill at least part of the breach.

“Great to see what started as a simple ‘what if we tried…’ chat with Governor Newsom turn into such a great step forward for EVs a year later,” Mike Murphy, CEO of the American EV Jobs Alliance, an advocacy group that works with car manufacturers to push U.S. and state lawmakers to adopt EV-friendly policies, said in a July 13 X post.

Who Will Qualify for California’s EV Rebates?

California’s EV rebates will be limited to residents of the state who have never purchased an electric car before.

The rebates will be available to car buyers at all income levels, but the new EVs have to cost less than $50,000, according to the law authorizing the rebates that was signed by Newsom. The price cap for used EVs will be $25,000, according to the law.

There’s a big catch, though: The California law states that there will be no price limits on rebates offered for cars made by “California-headquartered zero-emission vehicle companies,” which is a big boon to EV manufacturers like Rivian and Lucid. The largest U.S. electric vehicle maker, Tesla, was started in California, but the company moved its headquarters to Austin, Texas, in recent years.

How Much Do Used EVs Qualify For?

Under the California budget agreement, rebates will also be available for used EVs, but those buyers will only get $1,750.

Under the old federal tax credit, used EVs qualified for up to $4,000 in tax credits. The used EV tax credit was added for the first time in 2022 by former President Joe Biden’s administration. Prior to that, only new EVs qualified for any tax credits at all.

Can You Buy an EV in California From Out of State and Get the Rebate?

California’s previous EV rebates were limited to state residents, and the latest round of discounts is also expected to be limited to people who live in the state.

EV shoppers in other states might find solace in the fact that multiple states have often replicated California’s auto emissions regulations, and some might decide to copy the state’s plans to offer rebates to shoppers. According to the California Air Resources Board, 17 states have adopted at least part of California’s clean car regulations in recent years.

Reporting by Keith Laing, USA TODAY / USA TODAY. USA TODAY Network via Reuters Connect.