California has enacted a $135 million incentive program for first-time electric vehicle buyers that caps vehicle prices at $50,000 but exempts in-state automakers. The measure leaves Tesla at a disadvantage because the company relocated its headquarters to Texas in 2021. Rivian and Lucid, both based in California, qualify for the exemption regardless of price.
The program provides direct rebates to eligible buyers with no application required. New vehicles must cost $50,000 or less to qualify, while used vehicles are limited to $25,000. California-based manufacturers avoid these limits entirely.
Tesla operates its Fremont factory in the state and built much of its early market share there. However, its headquarters move to Austin means the company receives no exemption, even for higher-priced models. Some lower-cost Model 3 and Model Y variants remain eligible under the price cap.
Rivian, headquartered in Irvine, and Lucid, based in the San Francisco Bay Area, both benefit from the exemption. Their vehicles, including the Lucid Air starting at $70,990, can access the incentive without restriction.
