Key States Rethink Electric Car Subsidies

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carb rebates 2

California moves to provide rebate amounts based on income.  Georgia drops their rebate.  What’s next for EV give-backs?

No two states have a better reputation for supporting electric vehicles (EVs) than California and Georgia.  Both have offered electric vehicle rebates or tax incentives, with Georgia having offered up to $5,000.  However, things are changing.  Georgia ended its program July 1st according to Georgiaair.org.  Even California, who’s California Air Resources Board began all this EV fuzzy math, has decided to pull back its incentives.  Now, instead of those making millions per year receiving money back from the state for buying a car, only buyers making a quarter-million per year (or less) can participate in the rebate program.  The planners seem intent on moving to a rebate program (shown in the top graph) that has customers’ price paid for cars linked directly to their income.

CARB rebate info

At a recent CARB board meeting, the income limits were set after a debate about whether to use $400,000 per year or $500,000 per household.  During the discussion, Bill Gates was specifically identified as a person who would not qualify based on his income.  Mary Nichols, chairwoman of the California Air Resources Board, was quoted by the LA Times as saying in reference to the cap that high earners might still qualify “but someone like [billionaire] Bill Gates would not.”  Bill Gates would also not qualify due to his residency.  He lives in Washington State, not California.  BestRide was unable to determine how the new  income limits would be verified or enforced.  To date, CARB has relied on data based on optional surveys of those it gives funds to (see second graph). Many states do not have any income limits.  For example, the Commonwealth of Massachusetts does not set any income limit on the $2,500 it gives to those that buy and promise to keep for three years an EV.  Presumably, the wealthiest resident of the state could be receiving the rebates.

Many assume that the biggest recipient of the rebates is Tesla Motors, given the model’s popularity with the media.  Yet, in California Tesla owners trail Nissan and Chevrolet owners in total rebate dollars paid out.  The most common argument for the rebates is that making the EVs more affordable boosts sales.  However, that may not apply well to Tesla, who’s front man brags that its Model S is often the sales leader in its class, sedans costing up to $140,000.  A quick check of its website today shows that the base Tesla Model S 70D, priced at $76,200 has an “October Delivery.”  Hence, the waiting list for the car is about six to eight weeks.

Graphs labeled “Figure 5 and 6” courtesy of CARB Funding plan document.

 

 

 

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John Goreham

John Goreham