California Agency Pitches Tripling EV Rebate Funds

By Danny King June 9, 2011

The California Air Resources Board (CARB) said it may run out of rebates given to state residents who buy electric cars and electric motorcycles this summer despite a recent bump in funding for the project and wants to triple the next fiscal year's funding for the program to as much as $17 million. The agency also want to cut the present per-vehicle rebate next year in order to serve more potential electric-vehicle buyers in the most populous state. California is considered the most important market for boosting sales of new-technology vehicles because the state accounts for about one-seventh of all registered U.S. vehicles. California drivers were also big early adopters of the Prius and other conventional hybrids, and the state was part of the initial launch markets for both the Chevrolet Volt plug-in hybrid-electric vehicle and the Leaf last year.

LeafRear34.jpgCARB is proposing an increase in funding for the Clean Vehicle Rebate Project for the year ending June 30, 2012, to between $12 million and $17 million while cutting the per-vehicle rebate for battery-electric cars to $2,500 from $5,000. Under that scenario, 6,000 people could receive rebates during the next fiscal year, up from about 1,500 for the fiscal year ending this month. Rebate program funding for the present fiscal year was boosted by $2 million on May 26, to a total of $7 million, of which about  $2.1 million remains – enough for about 440 EVs.

The program awards rebates for qualified vehicles on a sliding scale ranging from $5,000 for a full-service highway-capable electric car like the Nissan Leaf to $1,250 for electric motorcycles and low-speed neighborhood EVs such as those made by former Chrysler subsidiary GEM. Chevrolet's plug-in hybrid Volt did not qualify for a $3,000 "advanced technology/partial-zero emissions" rebate because it narrowly missed the emissions cutoff, but General Motors has said the Volt's engine-generator will be re-tuned to make the 2012 model eligible.

Increasing the number of people who may get a rebate will far outweigh the impact of the allotment per vehicle being cut in half, said Paul Scott, co-founder of San Francisco-based electric-vehicle advocacy group Plug-In America and a salesman for Santa Monica Nissan, which sells the all-electric Leaf (above). "The $5,000 was fantastic, but it was a little rich," said Scott, He said he's sold about 160 Leafs since they became available to the public in December. Like most EV advocates, he believes government should help, though, because the cost of the technology-laden cars is simply too high to be competitive until more models and higher sales volumes help automakers realize some economies of scale.  "The rebate's still necessary as long as the battery cost is high," Scott said.

CARB is increasing the rebate funding as more freeway-capable zero-emissions electric vehicles, such as the Mitsubishi "i" (formerly the i-MiEV), Smart ED, BMW ActiveE and the Ford Transit Connect EV small van and Focus EV sedan become available to the public.  The program's funding is not dependent on the state's troubled general budget, which is facing an approximately $10 billion deficit for next year. Funds for the rebates come from a $40-million per year program - the California Alternative and Renewable Fuel, Vehicle Technology, Clean Air and Carbon Reduction Act – that funds transportation-related emissions-reducing programs including consumer rebates to help boost sales and use of zero-emissions cars and trucks.

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