ATLANTA — In what likely will be a significant blow to electric vehicle sales, two states have ended substantial EV incentive programs and a third is contemplating a similar action.
EV owners in Georgia, one of the states ending its incentive plan, were hit with a second blow as the legislature approved an annual fee of $200 on privately owned electric cars and $300 on commercial EVs to replace gasoline taxes. The fees approximately equal what the driver of a 25-mpg gasoline vehicle in Georgia would pay in state gas taxes for 15,000 miles of annual driving under a new state gas tax increase.
The impact of those actions on future EV sales isn't likely to be offset by Massachusetts' move last month to extend its $2,500 EV rebate program by adding $2 million to the fund.
Georgia's legislature last week voted to end a $5,000 tax credit for electric car purchases and to begin imposing a $200 annual user fee on EV owners — the highest such fee in the nation. The state has been the top market for Nissan Leaf EV sales for more than a year now, largely because of its generous tax credit program. The new measure takes effect in July.
Opponents of Georgia's EV incentive program have argued that the state is subsidizing new-car purchases for relatively well-to-do people. Supporters say that middle-class wage earners who could not afford the cars without incentives purchase many EVs.
Separately, an Illinois EV rebate program has been suspended as part of a statewide ban on spending instituted by the governor's office to help plug a $1.6 billion budget hole. Illinois is home to a large Mitsubishi assembly plant and has been a top market for that company's i-MiEV electric city car. The Illinois plan had provided a rebate of 10 percent of the electric vehicle's purchase price, up to a maximum of $4,000.
In a potential third blow to EV backers' hopes for improved sales of the vehicles, a Texas rebate program is due to expire in June and so far there's been no move to extend it.
Georgia EV enthusiasts not only will see the state incentive go away and be hit with annual use fees, they got the news at the same time the state legislature passed a bill extending vehicle registration fee relief to Mercedes-Benz employees who transfer to the company's new North American headquarters as it relocates to Georgia from New Jersey.
That measure, expected to cost the state $1.3 million in lost fees each year, would excuse transferring employees who lease their cars from the automaker from paying annual state car taxes.
Edmunds says: Plug-in vehicles may lose local support as states struggle for funds to repair aging highways and fill holes in their budgets. But the federal tax credit of up to $7,500 remains.