California bill would establish income cap for state EV rebates

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California’s goal is to have 1.5 million zero-emission vehicles on the road by 2025 – more than 15 times the current number. The state offers a rebate of $2,500 to buyers of EVs, in addition to the $7,500 federal tax credit. However, sales remain well short of the rate needed needed to meet the ambitious goal, and the incentive program has repeatedly run out of funds – there’s currently a waiting list of 13,500 buyers.

In an effort to get more bang for the state’s bucks, state Senator Kevin de León has sponsored a bill that would require the state Air Resources Board to cap the income of those eligible for the rebate and other incentives. According to a state survey, almost 80% of the rebates have gone to households earning over $100,000 per year.

“A $2,500 rebate to purchase an electric vehicle is not likely to matter to someone earning over $300,000 a year, but it does make a big difference to someone earning $60k a year,” de León told the LA Times. “Every community deserves clean air, regardless of wealth.”

The bill, which has passed the Senate and will now be considered by the Assembly, would also provide other incentives for low-income buyers to consider plug-in vehicles. A family of four with an annual income of $53,000, for example, could get $1,500 for retiring a high-polluting vehicle, a $2,500 rebate for buying an EV, and an additional $3,000 incentive specifically for low-income buyers. The incentive could be even larger for a buyer in a neighborhood with poor air quality.

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The legislation has support from environmental groups, according to the Times. The board should establish a limit that “keeps the program in the black but doesn’t slow progress” toward the 1.5-million-vehicle goal, said Maxwell Baumhefner of the Natural Resources Defense Council. “You could save quite a bit of money in the program’s budget without having an adverse impact on sales by limiting the upper-income folks. That is a better way to stretch valuable dollars than doing across-the-board rebate reductions.”

In the state’s rebate survey, 72% of respondents said the rebate was “extremely” or “very” important to their purchase decision, but that percentage declined as income rose – it was about 86% for LEAF buyers, but only 48% for Model S buyers.

“I think there is a fair argument that wealthy people have less of a need for rebates than others,” said Tesla VP Diarmuid O’Connell. But what’s really needed is more public money for subsidies for all buyers, he said.

 

Source: LA Times
Image: Nicolas Raymond/Flickr