EV Tax Credit Guide for California Drivers: What to Know

• The federal EV tax credit ended for vehicles acquired after September 30, 2025.
• Buyers who acquired an eligible vehicle on or before the deadline may still qualify under the previous rules.
• California's MyFirstEV program offers qualifying first-time zero-emission vehicle buyers up to $3,500 toward a new vehicle or $1,750 toward a used vehicle.
• SDG&E customers may qualify for a rebate of up to $4,000 when purchasing or leasing an eligible pre-owned EV.
• Incentive amounts and eligibility can change, so confirm current programs before buying or leasing an EV.

If you are shopping for an electric vehicle in Escondido, you may be wondering whether the EV tax credit can still lower your purchase price. The rules have changed significantly. The federal New Clean Vehicle Credit is no longer available for vehicles acquired after September 30, 2025. However, California drivers may still have access to state and local EV incentives, including programs that can reduce the purchase price of qualifying new or pre-owned electric vehicles.

For shoppers in Escondido, San Marcos, Vista, Carlsbad, and other North County communities, understanding these programs before choosing an EV can make it easier to compare your actual costs.

No. The federal New Clean Vehicle Credit ended for vehicles acquired after September 30, 2025. Older guides may still mention credits of up to $7,500 for new EVs or $4,000 for used EVs, but those incentives no longer apply to vehicles acquired today.

An exception applies to buyers who acquired a qualifying vehicle on or before September 30, 2025.

According to the IRS, a vehicle may still qualify if the buyer entered into a binding written contract and made a payment by the deadline, even if they took possession of the vehicle later.

Learn more: Used Clean Vehicle Credit

Under the previous federal rules, the New Clean Vehicle Credit could provide up to $7,500. Eligibility depended on several requirements, including the buyer's income, vehicle MSRP, battery requirements, final assembly location, and other federal qualifications. If you purchased an EV before the deadline and are unsure whether you qualify, review the IRS requirements and speak with a qualified tax professional before filing.

Yes. Although the federal EV tax credit has ended for new acquisitions, California continues to offer EV incentive programs. One of the most important programs for current shoppers is MyFirstEV, which the California Air Resources Board administers.

The program offers eligible California residents purchasing or leasing their first zero-emission vehicle:

$3,500 toward a qualifying new zero-emission vehicle and $1,750 toward a qualifying used zero-emission vehicle. The incentive is applied at the point of sale and is funded through the state and participating automakers. For new vehicles, the program has a $50,000 MSRP limit, while qualifying used vehicles must be priced at $25,000 or less. Because program requirements and participating vehicles can change, California shoppers should confirm eligibility before assuming a particular vehicle qualifies.

The 2026 Lexus RZ lineup includes the RZ 350e, RZ 450e AWD, and RZ 550e F SPORT AWD. The RZ 350e starts at $47,395, which is below MyFirstEV’s $50,000 new-vehicle price limit.
However, price alone does not guarantee eligibility. Check current program requirements and ask Lexus Escondido about available incentives before purchasing.

North County San Diego drivers may have another option if they are shopping for a pre-owned electric vehicle.

SDG&E's Pre-Owned EV Rebate Program currently offers eligible residential customers a $1,000 standard rebate for purchasing or leasing an eligible used battery-electric or plug-in hybrid vehicle.
Income-qualified applicants may instead receive up to $4,000 through the Rebate Plus option.

Applicants generally need to submit their application within 180 days of purchasing or leasing the qualifying vehicle. The EV must also meet the program's current battery and registration requirements. That makes this program especially worth checking for Escondido, San Marcos, Vista, Carlsbad, and other local buyers served by SDG&E.

To learn more: San Diego Gas & Electric (SDG&E)

An EV tax credit generally reduces your tax liability, subject to the rules of the specific tax program. A rebate or point-of-sale incentive can work differently by reducing the cost of a qualifying vehicle or giving you money back after purchase. This distinction matters in 2026 because the previous federal EV tax credit has ended for new acquisitions, while California and local programs can still provide savings.

Rather than looking only for a federal tax credit, North County EV shoppers should compare all available state, utility, manufacturer, financing, and dealership incentives.

EV incentive programs can change throughout the year, so check eligibility before completing your purchase. Start by confirming whether the vehicle meets the program's price and vehicle requirements. Then check whether you meet residency, utility-service, income, or first-time EV ownership requirements where applicable.

Finally, compare those programs with any current Lexus finance, lease, or cash offers. Lexus Escondido currently maintains separate electric and hybrid inventory, along with current manufacturer incentives, making it easier to compare options before deciding.

Even without the previous federal EV tax credit, California drivers may still qualify for state, local, manufacturer, or dealership incentives.
Lexus Escondido can help shoppers across Escondido and North County San Diego compare Lexus EV inventory, current offers, and available programs.
Browse the current Lexus RZ inventory or visit Lexus Escondido to compare trims, range, charging, pricing, and available incentives. Because programs can change, always confirm eligibility before purchasing.

No. The federal New Clean Vehicle Credit is not available for vehicles acquired after September 30, 2025.

A Lexus RZ acquired after September 30, 2025, does not qualify for the former federal New Clean Vehicle Credit. However, state, local, or manufacturer incentives may be available.

Yes. California's MyFirstEV program can provide eligible first-time ZEV buyers with $3,500 toward a new vehicle or $1,750 toward a used vehicle. Program requirements apply.

Yes. Eligible SDG&E residential customers can receive $1,000 for a qualifying pre-owned EV, while income-qualified applicants may receive up to $4,000.

Some programs may be combined, while others have restrictions. Check the rules for each incentive before you purchase or lease your EV.

Lexus Escondido offers new electric and electrified Lexus models for drivers throughout Escondido and North County San Diego, including the all-electric Lexus RZ.