Governor Newsom just signed SB 168, which means first-time EV buyers in California can now get an instant $3,500 rebate right at the dealership. The headline: there’s a $50,000 MSRP cap, so at first glance, that would leave out every Rivian. But here’s the twist: the bill makes a special exception for Rivian, so the cap doesn’t apply to them at all.
The actual text says rebates aren’t supposed to go to vehicles over $50,000, unless the carmaker is based in California. That means Rivian (Irvine) and Lucid (Bay Area) are both in the clear, just because of where their HQs are.
If you’ve got a Rivian reservation, pay attention to the order here: the R2 Performance Launch Edition ($57,990) is eligible. So is the Premium ($53,990). Technically, so is the R1S, based on the way the bill is written.
Tesla doesn’t get this perk. Since Elon Musk moved their headquarters to Austin a couple years ago, Tesla has to stick to the $50,000 cap like everyone else (although most of their cars qualify anyway). This bill is definitely playing favorites.
There’s $135.5 million from the state, and automakers have to match it dollar for dollar. That’s important: if Rivian (or any company) doesn’t join in and cover their half of the $3,500 rebate, you don’t get the full amount. As of now, Rivian hasn’t officially said they’ll pay up, and even the Governor’s press release doesn’t mention this special California company carve-out. That’s a little weird, considering how big a deal it is.
There’s another catch: this rebate is only for your very first zero-emission vehicle. If you already own an R1T or R1S, you’re out of luck. Even if you want to trade your R1 for an R2, you don’t qualify. This is all about convincing gas car owners to make the switch, which fits a lot of R2 buyers, but not the longtime Rivian crowd.
One more thing: lawmakers are already bracing for a lawsuit over this carve-out. They added a special clause so that if a court strikes down the California-company exception, the rest of the rebate program still stands. But if a rival automaker sues and wins, the $50,000 cap comes back, and suddenly, only the cheapest Rivians (which aren’t even available until 2027) would qualify.
The program kicks off “later this summer.” Right now, only the R2 Performance is available to buy, and it’s the one that benefits most from this carve-out (if it survives any court fights).
Bottom line: if you’re a first-time EV buyer in California with an R2 on order, this could mean $3,500 off a car that normally wouldn’t qualify for any rebate. Now, we just have to see if Rivian actually joins in and covers their half. For folks who already drive a Rivian, this deal isn’t for you, and that’s by design.
It also covers used:
$1,750 off used electric vehicles sold for up to $25,000
I don’t see an issue if they’re supporting state companies.
Agreed. If it’s California dollars that’s paying for it, no issue in promoting Cali businesses
It is not that simple. The Commerce Clause of the U.S. Constitution gives the federal government the power to regulate interstate commerce. A strong argument can be made that any state legislation which uses manipulation of “rebates” paid by a state to give businesses within that state a marketing advantage over out-of-state businesses is a violation of federal law. Since Trump does not like Newsom at all, it is likely that the Department of Justice is already drafting a suit to block this scheme. The answer to California’s problem with major companies leaving the state is reduction of taxes and regulation of State businesses, not phony rebate schemes.
Does leasing a Rivian leave you out of this rebate?
If I’m leasing an R1S now, does that mean I’m not a first time buyer because technically, I’m renting the vehicle? I’m interested how this applies to anyone who’s recently taken delivery or about to take delivery, asI’m taking delivery of my R2 in three weeks.