Big­ger re­bates for EV buy­ers hit a speed bump

The Mercury News Weekend - - BUSINESS - By Louis Hansen lhansen@ba­yare­anews­group.com

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.

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