Bigger rebates for EV buyers hit a speed bump
Hoping for a bigger state rebate check next year for your new Tesla Model 3 or Chevy Bolt? You’ll have to wait. State lawmakers nixed a $3 billion plan to add incentives to electric vehicle purchases, stalling an effort that supporters say would have boosted sales of zero emission vehicles in California. The proposal by Assemblyman Phil Ting, D-San Francisco, called for enhanced rebates to bring costs for electric vehicles in-line with gas-powered cars.
Critics questioned how the $3 billion program would be funded. A senate committee re-wrote the measure, Assembly Bill 1184, asking the parties study the issue further. Supporters expect to bring a revised proposal back next year.
“It’s so critical to double down on investment in zero emission vehicles,” Ting said in an interview, adding that the proposal would help the state meet its environmental goals. “There’s no question we can continue to lead the nation in these policies.”
Consumers and auto dealers want more certainty that the state’s clean vehicle rebate pro-
gram, funded annually by the General Assembly, will have a stable, long-term source of revenue, he said. Ting wants to identify a regular funding source to provide $3 billion over 12 years for vehicle rebates.
Gov. Jerry Brown set a goal of putting 1.5 million green cars on California roads by 2025. Although the state leads the country in EV purchases, it has about 300,000 low and zero- emission cars on the roads. Hybrid and battery-powered cars make out about 3 percent of all car sales in the state since 2013.
Most new, low- emission vehicles are eligible for federal tax credits of up $7,500. The incentives phase out after a manufacturer sells 200,000 qualifying vehicles. The California rebate could have softened the federal phase- out period for manufacturers and buyers.
The higher state rebates would benefit automakers introducing new, lower-priced electric vehicles. Tesla delivered its first, lower cost Model 3 to select customers in July. The Model 3, starting at $35,000, brings Tesla’s luxury brand into a broader market.
GM rolled out the Chevy Bolt, an all- electric hatchback starting at around $37,000, in California late last year. Several major automaker have announced plans to electrify their fleets or dramatically expand their plug-in offerings.
Steve Chadima, senior vice president for the clean energy business association Advanced Energy Economy, said the set-back would not deter efforts to raise rebates in California. Chadima said larger rebates sell more vehicles and drive down prices for future generations of battery-powered cars.
The state also needs to address its clunky rebate process, he said, which requires buyers to pay full price for a vehicle and apply to the state for a check. The industry wants to allow car dealers to instantly provide the rebate at the time of sale.
Critics also questioned whether the Tesla, operator of the state’s only auto factory in Fremont, would unfairly benefit from the rebate program.
But Chadima said many owners of $100,000 Teslas are ineligible for a $2,500 state rebate because they exceed the state program’s income cap: $ 150,000 for single taxpayers and $300,000 for joint filers.
“Telsa’s not really the big winner here,” he said.
The General Assembly session ends Friday.