CARB Chair Lauren Sanchez on the Future of California’s EV Incentives and Infrastructure

From BloombergNEF 2026, CARB Chair Lauren Sanchez details California’s proposed $200 million rebate strategy to backfill lost federal EV incentives and maintain market momentum. She addresses rising U.S. manufacturing competition, pressures in the ZEV credit market, and the legal stakes around California’s Clean Air Act waiver, while pointing to cap-and-invest funding, heavy-duty fleet electrification, and wildfire mitigation as key pillars of the state’s path forward.

Editor’s Note: The following excerpt begins mid-discussion and has been lightly edited for clarity.

[Lauren Sanchez]…What do I make of this flatlining? I would say it’s largely the result of targeted attacks from the federal administration on this agenda and on California’s progress leading it forward. It’s true that we saw a period of rapid growth when the Governor came into office. At that time, only about 4% of new car sales were zero-emission vehicles. Last year, that number reached roughly 25%. We know incentives have played an incredibly critical role over the last decade. And for the first time in 20 years, the federal government has eliminated the federal EV tax credit. That has created significant headwinds.

To continue pushing forward, incentives will remain critical. That’s why here in California, the Governor has proposed $200 million to backfill the federal EV tax credit while we continue litigating to protect our regulatory authority. But stepping outside California for a moment — is 25% our high-water mark? Absolutely not. The European Union recently announced that EV sales have surpassed petroleum vehicle sales. The United Kingdom is approaching 30% EV market share. China is now over 50%.

I also recently met with partners from Canada, where policy shifts, including tariff changes on Chinese EVs, are reshaping the market conversation. And I’ll close by quoting Mary Barra, CEO of one of the legacy American automakers, who recently said that EVs are the end game. Here in California, we couldn’t agree more.

[Dana Hull] Let’s talk about the proposed $200 million rebate program. Many details are still being negotiated in Sacramento. How might this program be structured? Would it be a point-of-sale discount? Will there be income targeting or MSRP caps?

Great question. Specific details will be publicly announced next week as part of the budget process with the legislature. One of our top priorities is ensuring that funding reaches Californians quickly at the point of sale. We’re working closely with automakers to ensure those dollars can effectively reduce vehicle costs upfront.

Industry data shows that every $1,000 in EV incentives increases sales by roughly 5%. We are analyzing what incentive level would be most effective. The federal tax credit offers a helpful structural model, and California’s Clean Vehicle Rebate Program has already provided over half a million rebates over the last 15 years. Details will be announced soon, but incentives remain essential to maintaining momentum amid federal challenges.

Is there potential for automakers to match California’s rebate funding?

We are certainly open to those conversations. Many legacy automakers are working aggressively to remain competitive in a rapidly evolving global market. California is home to over 50 zero-emission vehicle-related companies, and we take pride in supporting domestic manufacturing. These discussions will involve automakers, legislators, and funding mechanisms like our cap-and-invest program, which helps finance clean transportation incentives.

Environmental justice groups often question whether EV rebates disproportionately benefit wealthier households. How is the program addressing equity concerns?

That’s an important discussion in California. The immediate goal is to deploy funds quickly to sustain EV adoption momentum, particularly after recent declines in quarterly sales. However, California already operates several programs specifically targeting low-income households. These include the Clean Cars for All program and the Driving Clean Assistance Program, both of which provide targeted support for underserved communities. Equity has long been embedded in our clean transportation strategy.

There is growing perception that the ZEV credit market has weakened due to regulatory uncertainty. What is your outlook?

I remain optimistic. Globally, EV adoption continues to accelerate. I recently attended the UN climate conference in Brazil and saw electric buses and EVs dominating urban roads. In China, EV license plates are visually distinct and widespread. This is a global industrial transformation.

Here in California, 18 million residents breathe unhealthy air. Transitioning to cleaner vehicles is essential for public health and climate goals. While federal opposition creates challenges, California remains committed to advancing this transition.

Could vehicles manufactured by companies like BYD eventually enter California markets?

That question extends beyond the Air Resources Board’s authority. However, it highlights global competitiveness challenges. China has rapidly expanded leadership in solar, batteries, and EV manufacturing. Federal policies have weakened domestic manufacturing momentum, but California remains committed to supporting innovation and competitiveness where possible.

Let’s talk about litigation and California’s Clean Air Act waiver. Where does that stand?

California has a strong legal track record defending its environmental authority. During the previous federal administration, California filed over 100 lawsuits, winning the majority, including many related to climate and air quality protections. We are again defending our waiver authority, which has been protected under the Clean Air Act for more than 50 years. We remain confident in prevailing through litigation.

Charging infrastructure remains critical. Can you discuss California’s expansion efforts?

California now has over 200,000 publicly accessible EV charging ports — more than gasoline nozzles statewide. Most of that infrastructure expansion has been funded through state programs. Heavy-duty charging infrastructure is also expanding rapidly. Several fleet operators have already electrified operations and achieved cost parity with diesel vehicles.

Let’s shift to cap-and-invest and carbon offsets.

Offsets play a limited but important compliance role while also funding environmental and community programs. California’s offset protocols are widely recognized internationally as gold-standard systems for verification and enforcement.

The legislature recently extended cap-and-invest through 2045 to align with our carbon neutrality goals. The program has generated over $34 billion for climate and infrastructure investments, including transit, affordable housing, wildfire prevention, and community air protection programs. More than 70% of funding benefits frontline communities, and billions more are returned directly to Californians through climate utility credits.

Passenger vehicles remain California’s largest emissions source, but wildfire smoke also severely impacts air quality. How is the state addressing wildfire-related pollution?

Wildfire smoke is a serious public health issue. California’s primary strategy focuses on reducing catastrophic wildfire risk through forest management and prescribed burns. CARB works closely with Cal Fire and local air districts to coordinate beneficial fire programs. The state is also funding clean air centers to provide safe air refuge during wildfire events.