California EV Rebates Are Back in Effect

By · September 08, 2016

Nearly 30,000 consumers who bought a Nissan LEAF in California since 2010 have received a rebate, commonly $2,500.

California Gov. Jerry Brown and the state legislature last week approved the allocation of $133 million to continue providing rebates for the purchase of so-called clean energy cars. The program, which was established in 2009, has commonly supplied a rebate of $2,500 for buying a pure electric car and $1,500 for a plug-in hybrid. The program was temporarily out of money, forcing administrators to put EV buyers on a waiting list.

The program is now back on track. People on the waiting list should expect to receive checks in November.

The agreement to restore the program’s funding—part of $900 million in cap-and-trade revenues—was made on the closing day of the legislative session. The suspension of the rebates resulted from concerns about the long-term viability of the state’s cap-and-trade program. Funding for the clean-car subsidies come from auctions that are part of cap and trade—a system that caps the amount of greenhouse gases large companies can emit, and requires them to buy permits for polluting beyond those caps.

“California’s combatting climate change on all fronts and this plan gets us the most bang for the buck,” Gov. Brown said. “It directs hundreds of millions where it’s needed most, to help disadvantaged communities, curb dangerous super pollutants and cut petroleum use.”

Buyers like Buddy Voit, who purchased a Nissan LEAF in University City, Calif. three months ago, had been left in the lurch when the funding ran out. “It's frustrating," Voit told the San Diego Union Tribune. “I took a down payment equal to what I thought the rebate was going to be.” He had applied in mid-June and been approved by the Clean Vehicle Rebate Project—but learned that consumers applying after June 10 were put on a waiting list.

Given the tenuous nature of state budgets, funds have run out—and waiting lists formed—about four times since the program started in 2010. Each time, the program was restored in relatively short order.

The rebate has helped Californians purchase about 150,000 plug-in cars since 2010. As of June 30, the program provided rebates for the purchase of 93,496 battery-electric vehicles; 62,887 plug-in hybrids; and 283 fuel-cell electric vehicles. Total funding for the life of the project exceeds $335 million.

The re-instated program has new terms that lower the limit on how much a person can earn and still qualify for the rebates. That provision resulted from criticism that the state was subsidizing wealthy people who could afford to buy an expensive EV, like the Tesla Model S, and therefore didn’t need the rebate. The new cap on annual earnings is $300,000 for joint filers and $150,000 for buyers who file as a single person. This rule becomes effective on Nov. 1. (The previous limits were $500,000 and $250,000 for joint and single filers respectively.)

“With this agreement, we take an aggressive approach to investing cap-and-trade funds that provides tangible results for cleaner air and helps lower income Californians benefit from emission reduction programs,” said Assembly Speaker Anthony Rendon, D-Paramount (Los Angeles County).

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