California aims to support electric vehicle (EV) adoption with a proposed budget allocation of $200 million for an incentive program targeting light-duty zero-emission vehicles. This initiative, part of Governor Gavin Newsom's budget for 2026-2027, seeks to mitigate the impact of lost federal tax credits on potential buyers.
The budget proposal, announced on Friday, emphasizes making ZEVs more affordable and accessible. Although the plan requires legislative approval this year, successful passage could sustain the increasing trend of EV sales, which accounted for nearly 30 percent of auto sales in California during the third quarter of 2025, as reported by the California Energy Commission.
Details regarding the distribution of the proposed $200 million remain unclear, although reports indicate the rebate may function as an instant discount at the point of sale. The chairwoman of the California Air Resources Board, Lauren Sanchez, mentioned discussions are underway regarding potential tax credits for purchasers of used EVs, reflecting ongoing efforts to enhance EV affordability.