State EV Rebates on Hiatus in California (Unless You're Poor)

Matt Posky
by Matt Posky

California wants to fund more generous rebates for electric vehicle buyers as part of a massive agenda to support the adoption of zero-emission vehicles. In addition to federal incentives, the state has its own rebate program and has made plans to add additional state-sponsored tax breaks for EV buyers.

However, according to the Center for Sustainable Energy, California’s Clean Vehicle Rebate program has almost run out of funding — for a second time — after Governor Jerry Brown neglected to include it in the state budget.

As a result, the program can no longer offer rebates to purchasers of zero-emission vehicles and has placed those who made a purchase after June 30th on a refund waiting list. It’s bad news for anyone in California who wanted to by an electric car. Well, unless you’re poor, because the State of California really wants to convince low-income households to buy electric for some reason.

This isn’t the first time California has showed a bias toward low-income individuals in regard to EV purchasing. Earlier this year, the state mandated that Volkswagen reserve a portion of its charging network for disadvantaged neighborhoods — instead of the higher traffic or commercial areas electric vehicles are more likely to occupy.

The state is also considering the California Electric Vehicle Initiative, which would apply additional incentives directly at the time of purchase, rather than forcing taxpayers to wait for a refund. That bill provides $3 billion in state incentives on top of the federal rebates based on manufacturer quotas. If passed, it would also set aside $500 million per year in cap and trade program funds to ensure that disadvantaged communities, schools, transit buses, and freight benefit from the electrification push.

California’s current EV program reimburses shoppers after the purchase of plug-in electric or fuel cell vehicles. Current state-based rebates range between $1,500 and $5,000, depending on the type of vehicle and the income of the buyer — prioritizing higher rebates for lesser incomes.

While there is absolutely nothing wrong with aiding the poor, why California thinks green vehicles are an essential aspect of that endeavor is bewildering. Electric vehicles provide numerous advantages, but affordability is often not among them. Even with government incentives, EVs typically cost more than internal combustion vehicles and possess a lackluster resale value. Frankly, it would be difficult to prescribe one to someone who lives paycheck to paycheck.

There are exceptionally low leases to be had in the Golden State that are far easier to recommend to cash-strapped individuals. But those models are traditionally lower-range EVs that would make for affordable commuter cars and little else. In the end, it’s still easier to tell someone to buy a used Honda CR-V and drive it until the wheels fall off.

Of course, none of this explains why California cares about who is buying zero-emission vehicles in the first place. The state is already leading the country in electric vehicle adoption, but it’s not keeping pace with its proposed goal of 1.5 million electric vehicles by 2025 and 5 million by 2030. With only about 300,000 EVs on California roads today, the state should be broadening its rebate reach — not focusing it on a small subset of the community that hasn’t been buying EVs.

It’s genuinely difficult to unpack the state’s rationale on the matter. While one almost wants to praise California for sticking it to the wealthy in this minuscule manner, it doesn’t seem to be helping the disadvantaged in any meaningful way. Instead, you’re left furrowing your brow in a futile attempt to identify who exactly is getting the best end of the bargain. Automakers? Mother Earth?

According to CarsDirect, the Center for Sustainable Energy said the rebate program will run out of money fairly soon, but it expects the state legislature to make a funding decision by September 15th — the end of its session.

[Image: Nissan]

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • Brianbobvaughn Brianbobvaughn on Jul 12, 2017

    https://cleanvehiclerebate.org/eng/income-eligibility I like sourcing my information first. It's 300% federal low income. Not great wages, but "low income" is a little misleading. Some people who fit in this category, don't consider themselves at poverty, and want/have Hybrids/EV's. Not everyone lives in LA where COLA is insane. California is a big place.

  • Kosmo Kosmo on Jul 12, 2017

    Right or wrong, I think CA just believes this to be good political optics. It's not like it will cost them much money, since so few of the intended recipients of this tax break will ever utilize it.

    • HotPotato HotPotato on Jul 16, 2017

      Ding ding ding! That is correct. In California's Central Valley, where agriculture and oil is all there is and most people are literally dirt poor, but air quality is terrifyingly bad, they've worked to *actually* put poor people in EVs with a pilot program that put fat public down payments on dirt-cheap used first-gen EVs for low-income people (2012 Nissan Leaf with battery degradation anyone?), and offered free slow charging at the public library. A low entry price for a nice clean reliable late model used car with 127 mpg-e, occasional free fuel, and essentially zero scheduled maintenance required -- that actually is a good deal for someone without much dough who just needs to get themselves to work and the kids to school. And it's a damn sight better for everyone's lungs than whatever they drove before, e.g. a clapped-out '93 Explorer spewing a trail of death yet getting smog check waivers because the cost of repair would exceed the value of the car. The short range of the Leaf makes no difference -- there's no way in hell they would have trusted that Explorer on a road trip anyway. A gross polluter off the road, a non (tailpipe) polluter replacing it, a'safer and more reliable ride that saves the family money, and one of the best cost/benefit ratios available in a pollution control initiative : everyone wins.

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