You likely know by now, but the federal EV tax credit has been dead for some time, and even before that the list of qualifying EVs was narrowed significantly. The good news is that electric and hybrid vehicles are getting cheaper, with the prices of raw materials coming down and more sophisticated manufacturing processes available. But that doesn’t change the fact that those extra incentives and credits really sweetened the deal. California evidently wants to create new incentives to keep buyer momentum going and has proposed a $200 million program to entice more people to drive green.
Not all of the details are available just yet, but California’s Governor Gavin Newsom proposed the bill that not only introduces state funds for EV purchases but also encourages manufacturers to match state contributions. Incentives will be available at the point of sale to reduce costs for buyers, hopefully, giving a meaningful financial benefit sooner rather than later. While all of this sounds great, there is one big catch.
The incentives are for first-time EV buyers only. If you already own an electric vehicle, you don’t qualify. The idea there is that it will push new buyers to upgrade to an EV and eco-friendly alternative over gas the next time they need a new vehicle.
What else do we know about the proposed bill?
Some may not be happy with the “new buyer” requirement, but this does prevent someone from saving on their fourth or fifth purchase when others have yet to benefit. The proposal does, however, mention “the purchase or lease of new, and the purchase of used, light-duty passenger electric vehicles.” So, California residents would feasibly be able to buy new or used, or lease, with financial benefits, if the bill passes.
There are some other restrictions. California plans to put a cap on eligibility based on the new vehicle prices. They must be at or below $55,000 for new passenger cars, or below $80,000 for new vans, SUVs, and pickup trucks; some of the most reliable EVs on the market do qualify and fall between those cost estimates. Used vehicles are limited to under $25,000. What’s more, it’s unclear how much each financial benefit will be, but if the state follows in the footsteps of its past rebate program, which offered rebates up to $7,500, then the $200 million will likely go fast. That’s about 26,000 possible credits, not including any other costs. But having the manufacturers match the state’s contributions dollar for dollar should stretch that even further.
Right now, it’s merely a proposal. Purportedly, not many proposed bills and resolutions become law and there’s still a lot to figure out before this bill passes. If it is established, the California Air Resources Board will oversee the program.
