California EV Rebates Now Based on Income | Edmunds

California EV Rebates Now Based on Income

SACRAMENTO, California California's Clean Vehicle Rebate program has helped make electric vehicles and plug-in hybrids more affordable for state residents since 2010, with a large share of the program's funding going to people with relatively high incomes.

That changed this month with the start of a new income-based rebate schedule aimed at boosting the clean car buying power of lower-income households while cutting off funding to the wealthy.

As of July 1, individuals and families with annual incomes less than three times the federal poverty limit will get a $4,000 rebate for purchasing or leasing an EV, up to $3,000 for a plug-in hybrid and $6,500 for buying or leasing a fuel-cell vehicle. That's up from the old program's limits of $2,500 for an EV, $1,500 for a plug-in hybrid and $5,000 for a hydrogen fuel-cell electric vehicle.

The poverty level, set by the federal Department of Health and Human Services, is adjusted annually and this year is $11,770 for an individual and $24,250 for a family of four (income levels are slightly higher in Alaska and Hawaii).

That means an individual with an annual income of up to $35,309, or a family of four with an annual income under $72,750 can now qualify for up to twice the rebate amount as in previous years. A family of six could earn up to $97,709 and still qualify for the higher state rebate.

Individuals with annual incomes above $250,000 or families with more than $500,000 in annual income are no longer eligible for the rebates for EVs and plug-in hybrids but still can qualify for the state's standard $5,000 rebate for a fuel-cell electric vehicle such as the upcoming Toyota Mirai.

An ongoing survey by the Center for Sustainable Energy shows that over the past three years, 16 percent of those receiving California Clean Vehicle rebates had annual incomes above $300,000 and that 77 percent of all rebates went to individuals or households with incomes above $99,000 a year.

Under the new income-based program, California residents with incomes between the high and low levels will continue to qualify for the standard state rebate of $2,500 for an EV, $1,500 for a plug-in hybrid and $5,000 for a fuel-cell vehicle.

The California rebates are in addition to federal tax credits available to qualified purchasers of EVs and plug-in hybrids.

The voter-approved California rebate program, paid for from a surcharge on new vehicle registrations, has $163 million to distribute for clean vehicle purchases and leases made from now through June 30, 2016. That's up from $121 million in funding for the just-ended 2014-'15 fiscal year.

Proponents of the plan have argued for years that too much of the state's clean car incentive pool was going to buyers who didn't need the help, while the available rebates weren't high enough to help low-income residents enter the clean car market.

While California is the first state with an income-based rebate system, Washington now has capped the cost of plug-in vehicles that can qualify for that state's clean car incentive: exemption from the state sales tax. EVs and plug-in hybrids that are sold for more than $35,000 don't get the tax break.

Edmunds says: Will the rebate changes hurt sales of the pricey Tesla Model S? Will the plan really boost ownership of EVs and plug-in hybrids in lower-income areas? Stay tuned!

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