California has officially approved its new MyFirstEV incentive program, but while the initiative is designed to encourage more first-time EV buyers, one notable automaker won’t receive the same treatment as two of its biggest rivals.
Governor Gavin Newsom signed SB 168 into law on Monday, creating a new point-of-sale rebate worth $3,500 for eligible new EVs and $1,750 for qualifying used EVs. The program is expected to launch later this summer, with participating automakers set to be announced next month.
The biggest talking point isn’t the rebate itself – it’s the exemption built into the legislation.
Under the program, new EVs priced above $50,000 MSRP are generally excluded. However, California-based automakers that exclusively manufacture zero-emission vehicles are exempt from that price cap. That means Rivian and Lucid can offer incentives on their EVs, including the Rivian R1T, Lucid Air, and Lucid Gravity, despite their significantly higher prices.
Tesla, despite continuing to manufacture the Model 3 and Model Y at its Fremont factory and maintaining major engineering operations in Palo Alto, does not qualify for the exemption because the company relocated its corporate headquarters from California to Austin, Texas in 2021.
That doesn’t mean Tesla is entirely excluded from the program. Lower-priced versions of the Model 3 and Model Y that fall below the $50,000 price ceiling could still qualify if Tesla chooses to participate. However, unlike Rivian and Lucid, Tesla won’t receive special treatment for higher-priced vehicles.
The new incentive is intended to help offset the loss of the now-expired federal EV tax credit, with approximately $270 million in combined funding coming from California and participating automakers. Another key difference is that the rebate is available only to first-time EV buyers, with the discount applied immediately at the time of purchase rather than claimed later through a tax return.
While Tesla remains California’s dominant EV brand, accounting for nearly half of the state’s electric vehicle sales last year, the new rules give Rivian and Lucid a unique advantage in their home state that Tesla no longer enjoys.
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