California increases EV rebate by $500 for lower-income buyers, makes earners over $150k ineligible

California’s Center for Sustainable Energy announced another modification to their Clean Vehicle Rebate Project (CVRP) today, raising the credit by an additional $500 for low-to-mid-income earners (below 300% federal poverty line) and lowering the eligibility cap to $150k for individuals and $300k for joint filers.  This raises California’s rebate to $4,500 for battery electric vehicles, $3,500 for plug-in hybrids and $7,000 for fuel cell vehicles for buyers in the lower-income category.

The standard rebate for buyers who do not fit either of the above categories remains at $2,500 BEV/$1,500 PHEV/$5,000 FCV.  The new income limits apply to vehicles purchased after November 1st, 2016, and the rebate is applicable to any new electric vehicle purchase, or a lease with at least a 30-month term.

California’s CVRP has been one of the more effective incentives for electric vehicle purchase, paying out over $335 million worth of rebates for over 157,300 vehicles and contributing to California being the fourth-largest EV market in the world (behind Norway, Netherlands and Hong Kong).

But the program is always looking for refinements to get even more people into electric cars.  Last year the state decided to raise the rebate for low-to-mid-income buyers and add an income cap to the program, with the thought that a $2,500 rebate probably doesn’t have much effect on the purchasing decisions of a household earning over $500k per year.  The rebate was raised to $4,000 for earners within 300% of the federal poverty line, and today’s changes take that philosophy a step further.

These purchase incentives have attracted criticism from the hypocritical dirty energy establishment.  While gas cars benefit from enormous subsidies which depress their lifetime use cost, electric cars have had to rely on purchase incentives put into place by federal, state and local governments to offset their moderately higher initial cost, as consumers generally attach higher importance to initial cost of a product than they do to running costs.

Last week, a coal executive accused Tesla of being a “fraud” which exists solely due to subsidies, to which Elon Musk responded that Tesla would be happy to go toe-to-toe with zero subsidies, as coal power receives orders of magnitude more than Tesla does.  Musk’s ideal scenario could be achieved by pricing externalities – a “carbon price,” which he supports – which charges polluters for the cost of the damage they are doing with their pollution.  This price would also apply to pollution caused by electric vehicle production and use, but because EVs are naturally much cleaner than gas cars, this would result in them becoming cheaper than their polluting competition.

To apply for a rebate on your California electric vehicle purchase or lease, visit the CVRP’s website here.