Two hate crime charges will be added to the eight counts of attempted murder already directed at Isaiah Peoples, 34, said Santa Clara County District Attorney's Office. Charges will be officially filed on Thursday.
People are scheduled to appear in court Thursday afternoon in San Jose.
"Prejudice is not harmless," said district attorney Jeff Rosen. "Some child is in critical condition today because of a person's ignorance and hatred. So today we are with her and her family and all our Muslim and Indian neighbors."
A 13-year-old was among the eight people injured in last month's attack in Sunnyvale, about 9 miles west of San Jose. The girl's father and brother were also wounded, police said.
Defense lawyer Chuck Smith did not file a plea during a hearing last month, instead asking a judge to postpone his arraignment.
"We clearly dispute that this was a deliberate act and this is a case of mental illness," he said, adding that his client is a religious man praying for the people who were injured.
An army veteran who contracted the US Defense Ministry accused people of driving his Toyota Corolla in the crowd at a major intersection in the city 1
"Accusations of hate crime can be filed when a defendant targets a person or group because of their disability, sex, nationality, race or ethnicity, religion or sexual orientation," the prosecution said.
Chief Assistant District Lawyer Jay Boyarsky said last month, as the Rosen's Office investigated the case and is considering hate crimes, that people targeted one or two pedestrians based on his perception of their race or religion.
If convicted, people face a maximum sentence of life in prison.
CNN's Stella Chan and Nicole Chavez contributed to this report.