California Offers Electric Car Rebates
California has again adjusted its electric car rebates program for buyers of fuel cell cars, plug-in hybrid, and all-electric cars in an effort to augment the sale of low emission vehicles. High-income earners are excluded from getting these rebates while low-income earners will get more money under the Clean Vehicle Rebate program.
These changes are designed to help California reach aggressive goals set by California Air Resource Board and Gov. Jerry brown to increase the number of Zero Emission Vehicles (ZEV) on the State’s highways. Gov. Jerry Brown wants 1.5 million ZEV on California highways by 2025 while the Air Resource Board calls for at least 15.4% of the new vehicles sold in the state to qualify under the definition of Zero emission.
Though California has the highest number of Zero emission vehicles on the road compared to other states, but with only nine years to go until the 2025 deadline, ZEV only makes up 3% of new cars on the State’s highways.
How the rebate program will work
Prospective buyers for hybrid vehicles with less income than 300% of the federal poverty level will receive $3,500 while those buying battery electric vehicles will receive $4,500 and $7,000 for fuel-cell vehicle buyers. This is $2,000 more per vehicle than they received two years ago and $500 more than they get currently.
300% of the federal poverty level translates into an individual gross income of $35,640 or less and a family of four with an income less than 72,900. These new rules make it harder for high-income earners to qualify. They cancel the rebates for those with income exceeding $150,000 for a single filer, $300,000 for joint filers and $204,000 for the heads of household filers.
Previously, there were no income caps at all. Anyone who bought a vehicle that met the qualifications for being a ZEV received a rebate regardless of the income level. But in 2014, this linkage of income to rebates was enacted through Senate Bill 1275 which also outlined other programs to increase sale in low-income areas.
“A lot of these rebates were going to wealthy folks buying their Teslas and we want to preserve these dollars due to their limited nature by targeting folks who really need them.” Joel Espino, a legal counsel for the Greenlining Institute stated.
But there is a concern about whether or not the rebate program will help California achieve the desired results. According to Jeremy Acevedo, pricing and industry analyst for Edmunds.com. The results are unpredictable but according to the data, high-income people are buying more of low-emission vehicles compared to the low-income people.
Colin Santulli, a senior manager of transportation at the center for sustainable Energy said, “We want to see different communities buy these vehicles so that more Californians can experience the benefits of driving Zero-emission vehicles and we are hoping to see a snowball effect that we see on other technologies.”
The changes to the rebate program continues to raise many questions for analysts such as:
Is $500 extra really enough to get the low-income people who have always stayed out of the market? Is there infrastructure in place for the low-income buyers and are there charging stations in low-income people zip codes?
Joel Espino admits that the program comes with challenges but also adds that increasing electric car rebates for low-income buyers is not the only strategy they have taken to get more zero-emission vehicles on the state’s highways.
A financing assistance pilot program called buy down grants has also been launched to offer affordable loans for the low-income ZEV car buyers. Later this years, several automakers will roll out new electric car models at lower prices. Chevrolet Bolt will be priced at about $37,500 while Tesla Model 3 set to debut in 2017 will be priced at $35,000.
“These cars will help you save money on maintenance and gas and who best to benefit from this that the low-income folks especially when you consider the impact of vehicle pollution in these communities.” Espino said. “To us, given the prices of ZEV, it makes sense that a person making $150,000 and above is in a position to afford a ZEV without needing a rebate.” Espino Concluded.
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