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California bill would eliminate EV rebates for wealthy

State would determine a household income threshold for current $2,500 rebate.

By Douglas Newcomb Thu 1:39 PM

Tesla Model S. Photo by Tesla.The California legislature wants to phase out state tax incentives that go to wealthy electric vehicle owners -- particularly those who purchase the expensive and popular Tesla Model S.


A recent bill directs the state’s Air Resources Board to determine a household income threshold at which the current clean-vehicle rebate of $2,500 for an electric car would be eliminated.


The bill, SB 1275, sponsored by Sen. Kevin de León (D-Los Angeles), is headed back to the California Senate to approve changes made by the Assembly before going to Gov. Jerry Brown, who has until the end of September to sign it into law. According to environmental groups backing the bill, it would make EVs more affordable to working families and help improve California’s air quality.

Unlike a tax credit that lowers what someone owes in annual income tax, California's rebate is an actual check. So far, more than 72,000 EV buyers have taken advantage of the current California rebate and the state has paid out more than $151 million, according to the Center for Sustainable Energy, which administers the program. A state survey of EV owners found that almost four-fifths of that amount has gone to households earning $100,000 or more annually -- and almost half of those submitting rebates for Tesla's premium electric sedan, which costs at least $70,000, earned at least $300,000.


The bill, which has the support of several environmental groups, would siphon off rebates from more affluent buyers and direct them toward subsidizing EV purchases for low-income consumers and also bundle other state incentives. For example, a family of four earning an annual household income of $53,000 could get $1,500 for purchasing a new EV and keep the existing $2,500 rebate.


Low-income families could also qualify for an additional $3,000 incentive for a clean-air vehicle, which could increase for buyers living in areas with poor air quality.


"This bill will make electric cars and car-sharing opportunities affordable to working families," Vien Truong, environmental equity director for the Greenlining Institute, told the Los Angeles Times. "It will also let low-income families cash in their clunkers and use that voucher with clean-car rebates."


But Plug In America, an electric-vehicle advocacy group, opposes the bill.


"Depending on the specific income cap chosen, the bill's impact on the acceleration of EV adoption could be devastating," said Mike Kane, the group’s treasurer.


He added that lower-income communities already gain from the current program since every EV sold reduces air pollution caused by automobile traffic.


“Clean-air benefits occur in areas close to freeways … communities that are disproportionately low income,” Kane said. "The argument that lower-income communities aren't benefiting from clean-air rebates is fallacious."


De León, the bill’s sponsor, contends that the future of the state’s air quality depends on more Californians taking advantage of the EV rebate programs.


"Tackling climate change and dirty air requires policies that reach all of California's communities," he said. "Clean-air rebate programs must be accessible to every California community, regardless of wealth."


The bill is designed to help the California Air Resources Board achieve its goal of getting 1.5 million zero-emission vehicles in the fleet by 2025, or more than 15 times the number now on state roads. The agency also set as a target to have 15 percent of all new vehicles sold within the state to be zero-emission vehicles by 2025.


[Source: Los Angeles Times]

4Comments
Fri 7:53 AM
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So instead of being fair to all, California wants to make the wealthier buyers pay full price and give discounts and incentives to lower-income buyers.  I don't think someone looking at $20K-$30K cars is interested in a $70K car even with up to $7000 in rebates and incentives.
Fri 11:33 AM
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I have a better idea.  STOP ALL INCENTIVES AND REBATES!

 

Let the MARKET determine what's purchased instead of some do-gooder in Sacramento.

 

If people want electric or hybrid vehicles, let them pay for it.

 

Why should MY TAXES subsidize someone so they can buy a NEW car when, partly because of the taxes I pay, I can't afford a good used one!

 

And don't even start on how this IMPROVES air quality for everyone.  All electric vehicles do is RELOCATE the pollution to where the power is generated.  This is not to mention putting more load on an already overloaded power grid.

Fri 8:03 PM
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This will be a true testament as to whether Tesla can survive without government rebates. 
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