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Income Cap Coming For CA Electric-Car Rebate, Tesla Most Vulnerable?


Tesla Store Los Angeles [photo: Misha Bruk / MBH Architects]

Tesla Store Los Angeles [photo: Misha Bruk / MBH Architects]

Enlarge Photo

California buyers of battery-electric cars currently get a major perk: a $2,500 purchase-rebate check from their state government.

The rebate, as well as a lower $1,500 check for purchase of a plug-in hybrid, has helped spur the adoption of electric cars in the state.

But with funds for the program regularly running low, some state officials are looking to make changes.

A new bill would make income a factor in eligibility for an electric-car rebate, according to The Los Angeles Times.

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Senate Bill 1275 would require the Center for Sustainable Energy State Air Resources Board--which administers the state rebates--to establish an income cap for the program.

Currently, nearly four-fifths of California's rebates go to households earning $100,000 or more per year, according to a state survey of buyers.

Targeting Tesla?

The car most likely to be affected by this change may be the Tesla Model S.

With a base price of $69,900--significantly higher than other all-electric cars--it tends to have the most affluent buyers. Half of Model S buyers who receive the rebate earn at least $300,000.

Tesla Store Los Angeles [photo: Misha Bruk / MBH Architects]

Tesla Store Los Angeles [photo: Misha Bruk / MBH Architects]

Enlarge Photo

A $2,500 rebate won't matter much to these buyers, said state Senator Kevin de Leon--the bill's author--whereas it may matter a great deal to people making only $60,000 a year.

And it would make the state's rebate funds last longer. The state Air Resources Board ran out of funding for rebates back in April and started a waiting list.

Additional funding was later secured to cover rebates through the end of California's fiscal year, but some buyers on the waiting list won't get their checks until September.

New incentives

The bill would also add further incentives for lower-income car buyers to adopt plug-in electric vehicles.

A family of four with an annual household income of $53,000, for example, could "bundle" the $2,500 rebate with a $1,500 incentive for retiring an existing high-polluting vehicle.

An additional $3,000 incentive for low-income buyers has also been proposed, with a provision to raise the amount for people living in areas with particularly high air pollution.

For residents who retire their internal-combustion cars and don't buy a new ones at all, the bill would provide $3,000 to pay for public transit passes or a car-sharing service membership.

The bill has passed the California Senate and will require approval by the Assembly's appropriations committee next. It has until August 31 to gain final passage and be signed into law by Governor Jerry Brown.

Regardless of what happens in Sacramento, though, electric-car buyers remain eligible for the $7,500 Federal income-tax credit, which is unaffected by state policies.

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