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California’s Clean Vehicle Rebates Mostly Go to the Wealthy

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While the public tries to get their heads around giving up combustion engines in favor of more environmentally conscious electrics, the government is trying to help them by issuing rebates.

Part of the public’s resistance is cost and even if you can afford the plug-in electric of your dreams without a rebate, that rebate sure is nice. Turns out, it’s mostly the wealthy in California who are benefitting from these programs.

The news comes through a study from UC Berkeley. It showed that most of the people who applied for these rebates came from high-income neighborhooeds.

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Two Berkeley graduates took a look at 98,901 rebates issued for buying or leasing a low-emission vehicle through the Clean Vehicle Rebate Project from 2010 through March of 2015. Pricing on eligible vehciles starts around $20,000 so they’re not always affordable. The study found 83 percent of those who received a rebate had yearly incomes over $100,000.

That may soon change wih new requirements that took effect this month. The rebates on light-duty passenger vehicles increased by $500 and applicants can’t have incomes more than 300 percent of the federal poverty level. Anyone with a gross income over $150,000 for single filers, $204,000 for head of household filers, and $300,000 for joint filers is not eligible.

Amplifying the problem is the nature of cars lower income people drive. They likely aren’t driving the newer more fuel efficient vehicles that wealthier people drive. It makes getting them out of their old cars and into newer and cleaner vehicles even more important if the state wants to help improve its air quality.

The state of California spent around $230 million on the CVRP last year and is on track to spend another $175 million during the current fiscal year. It’s not small investment, so the state wants to do everything it can do make each dollar count.

Limiting rebates to wealthier buyers likely won’t convince them to not buy a car. If they can afford it either way, then they’re still going to buy a clean vehicle and the few thousand dollars they lose in rebates isn’t going to change their minds. Eliminating them from the rebate pool won’t hurt the environment, but it will help California reduce its costs for the program.

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The bigger question is whether the changes to increase the rebate will be enough to get low-income citizens into clean vehicles or if it still won’t be enough to make the switch affordable.

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Nicole Wakelin

Nicole Wakelin