California & U.S. Incentives

Businesses and tax-exempt organizations that buy a qualified commercial clean vehicle may qualify for a clean vehicle tax credit of up to $40,000 under Internal Revenue Code (IRC) 45W. The credit equals the lesser of:

• 15% of your basis in the vehicle (30% if the vehicle is not powered by gas or diesel)
• The incremental cost of the vehicle

Qualified vehicles with gross vehicle weight ratings (GVWRs) of under 14,000 pounds have a maximum credit of $7,500.

Plug-in electric vehicles must draw significant propulsion from an electric motor with a battery capacity of at least:

• 7 kilowatt hours if the gross vehicle weight rating (GVWR) is under 14,000 pounds
• 15 kilowatt hours if the GVWR is 14,000 pounds or more

The federal tax credit for new and used electric vehicles ended on September 30, 2025. If you purchased a qualified vehicle before that date, you may be able to claim the tax credit on your 2025 federal income tax return.

New Vehicle Clean Credit up to $7,500.
You may qualify for a credit up to $7,500 if you bought a new, qualified plug-in EV before September 30, 2025. Under certain conditions between a dealership and a seller, "leasing" a vehicle may allow the purchase to be treated as a "commercial vehicle," thus making it eligible for the full tax credit without satisfying some of the strict program eligibility requirements. Be sure to inquire with the dealership and a tax professional when researching purchase options.

Used Vehicle Clean Credit up to $4,000.
If you bought a qualified used electric vehicle (EV) from a licensed dealer for $25,000 or less before September 30, 2025, you may be eligible for a used clean vehicle tax credit. The credit equals 30% of the sale price up to a maximum credit of $4,000. Additional Details.

The credit is nonrefundable, so you can't get back more on the credit than you owe in taxes. You can't apply any excess credit to future tax years.

The California Clean Fuel Reward has temporarily been reduced to $0, but is still providing EV information and resources to support their goal of reducing carbon emissions. Check the program website for more details.

The program will continue to be monitored and restored if/when conditions change.

CVRP program funding availability changes periodically, be sure to visit the program website for current information.

The CVRP is administered throughout the state for the California Air Resources Board, part of the California Environmental Protection Agency.

The Driving Clean Assistance Program (DCAP), in partnership with the California Air Resources Board (CARB), provides incentives statewide in California to assist low-income and disadvantaged communities in purchasing clean air vehicles. This program aims to combat climate change and predatory lending practices while also offering continuous financial coaching.

The Bay Area Air Quality Management District is administering a Clean Cars for All program that provides grants for income-qualified Bay Area residents to retire their older car and replace it with a hybrid, plug-in hybrid, or battery electric vehicle, or to get a Clipper Card for public transit.

The program is supported by the California Climate Investments program, a statewide initiative that addresses climate change by reducing greenhouse gases and improving air quality.

Income-qualified customers may qualify for the following options offered through this statewide program aimed at making clean vehicles accessible and affordable:

A cash grant of $7,000 for a plug-in hybrid vehicle (PHEV) and $7,500 for a battery electric (BEV) or fuel-cell electric vehicle (FCEV).

A Level 2 charging station installed in your home by GRID Alternatives, up to $2,000 value.

A $1,000 prepaid charge credit valid at public EVGO charging stations plus a lower-speed portable charger.

Incentive amounts and availability are subject to change, be sure to visit the program website to make sure it is currently accepting applications.

The BAR vehicle retirement program offers an incentive for retiring your operational vehicle. To qualify, your vehicle must be drivable and you must meet eligibility requirements. If you meet the income requirements, you may receive $1,500 or $2,000 to retire your vehicle. If you don't meet the income requirements, you may receive $1,350 to retire your vehicle.

The Bay Area Air Quality Management District offers eligible applicants $1,000 to take their operating and registered vehicle off the road. Vehicle must be a 1996 or older model and must have passed its most recent smog check inspection.

Contact: Environmental Engineering Studies, Inc. at 1-855-343-7314

The federal government ended the CAVD program at midnight on September 30, 2025, pursuant to Section 166 of Title 23 of the United States Code. While the federal government gave the DMV the authority to create the CAVD program, the state had to follow federal regulations that expired.

Eligible clean air vehicles (CAVs) with valid clean air vehicle decals can travel toll free or at a discounted rate on Bay Area express lanes and state-owned bridges (not including the Golden Gate Bridge). In order to receive the correct discount, eligible clean air vehicles should use a FasTrak Flex or FasTrak CAV toll tag.

If you install qualified vehicle refueling and recharging property at your home, including electric vehicle charging equipment, you may be eligible for a credit of up to $1,000 for each item of property.