California Governor Gavin Newsom signed Senate Bill 168 on Monday, formally launching the "My First EV" subsidy plan. The initiative provides a $3,500 instant discount for first-time electric vehicle buyers.
The program is funded by $135.5 million in state government funds, matched by participating automakers, creating a total pool of approximately $270 million.
The subsidy applies to new vehicles with a Manufacturer's Suggested Retail Price (MSRP) not exceeding $50,000, and used electric vehicles priced under $25,000 (which qualify for a $1,750 subsidy). This price threshold directly benefits the base versions of Tesla Motors's Model 3 and Model Y. However, the Cybertruck and higher-end trims are ineligible due to exceeding the price cap.
A notable focal point in the bill is an exemption clause for "pure electric vehicle manufacturers headquartered in California." This clause waives the $50,000 price cap for automakers like Rivian, allowing its approximately $58,000 R2 model to still qualify for the subsidy.
Conversely, Tesla Motors no longer meets the "California headquarters" definition after relocating its corporate base from the state to Texas in 2021, rendering it ineligible for this specific exemption.
The program aims to fill the policy gap left by the elimination of the federal electric vehicle tax credit. Data indicates that California's electric vehicle market share has dropped from nearly 25% a year ago to 15.7% in the first quarter of 2026.
While Rivian's standard R2 model meets the price threshold, its estimated delivery timeframe is in the first half of 2027, meaning it cannot benefit from the subsidy in the short term.
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