California proposes new $3 billion in incentives to support electric vehicle adoption

California is already leading electric vehicle adoption in the US, but they still need to speed things up if they want to achieve their goal of 1.5 million electric vehicles (EVs) by 2025, and 5 million by 2030. There are currently around 300,000 EVs on California roads today.

A new bill unveiled today would unlock $3 billion worth of incentives for an updated version of California’s current EV rebate.

Assemblymember Phil Ting (D-San Francisco) introduced Assembly Bill (AB) 1184, which is due for a vote next week.

He commented:

“Electric cars are the future.  We have reached a tipping point and it’s time to give the electric car revolution an aggressive boost. California’s ambitious goals to reduce climate altering emissions require transportation electrification.  We need an incentive program to get everyone behind the wheel of an electric vehicle.”

California currently offers a rebate after the purchase of plug-in electric or fuel cell vehicles ranging between $1,500 and $5,000 depending on the type of vehicle and the income of the buyer.

The new California Electric Vehicle Initiative (CEVI), which would be created by the AB 1184, would instead offer the incentive directly at the purchase of the vehicle, which would simplify the process.

The actual value of the incentive will also change, but it will still be determined by the Air Resources Board, in coordination with the California Public Utilities Commission and the California Energy Commission.

Ting says that they will structure the amount to be more competitive with similar gas-powered cars:

“They would be valued initially to make the cost of battery-powered vehicles comparable to similar models of gasoline-powered vehicles, after federal and other credits.”

Of course, those incentives will be applicable on top of the $7,500 federal tax credit if it is still available on the electric vehicles. A reminder that there is a limit 200,000 federal tax credits by automaker before a phaseout period is put in place.

Ting says that the $3 billion would come from “a portfolio of taxpayer-neutral sources” and that the bill also calls for “investing $500 million per year in cap and trade program funds set aside to ensure that disadvantaged communities, school and transit buses, and freight benefit from the transportation electrification.”

When considering Tesla’s upcoming expansion in the state in preparation for the Model 3 and VW installing ultra-fast 320 kW chargers as part of its Dieselgate settlement, it looks like California is in good shape to keep its role as a leader in EV adoption in North America.