Cash incentives offer an important way to encourage electric-car adoption, and California has one of the more generous programs.

A $2,500 rebate for new battery-electric cars and a $1,500 rebate for plug-in hybrids have helped grow the number of electric cars on the state's roads.

But recently, state officials decided to make some changes to the program to encourage broader adoption.

DON'T MISS: Income Cap Coming For CA Electric-Car Rebate, Tesla Most Vulnerable? (Aug 2014)

As funds for the program ran low, new legislation was passed to create an income cap for eligibility to participate in the rebates.

And the new income-based criteria take effect in mid-March, notes CarsDirect.

Under the new rules, individual filers listing more than $250,000 in annual income on their state taxes will no longer qualify for the battery-electric and plug-in hybrid rebates.

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

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

That also applies to head-of-household filers with more than $340,000 in annual income, and joint filers making more than $500,000.

However, buyers in these categories still qualify for the $5,000 rebate for new hydrogen fuel-cell cars.

At the other end of the spectrum, buyers making less than 300 percent of the Federal Poverty Limit--currently $35,310 for individuals and $60,270 for a family of three--will get larger rebates.

ALSO SEE: Tax Credit For Hydrogen Fuel-Cell Vehicles Extended By Budget Deal

For this group, rebates increase to $4,000 for battery-electric cars, $3,000 for plug-in hybrids, and $6,500 for fuel-cell cars.

Buyers whose income falls between those markers are unaffected.

They'll still be eligible to apply for the $2,500 purchase rebate for battery-electric cars, $1,500 for plug-in hybrids, and $5,000 for fuel-cell cars, just as before.

2016 BMW X5 xDrive40e

2016 BMW X5 xDrive40e

Regardless of the California rules, all electric-car buyers are still eligible for a Federal tax credit of $2,500 to $7,500 (depending on battery size), which is unaffected by state policies.

The change in California policy is another blow to affluent plug-in hybrid buyers, as the state also recently exhausted its supply of "green stickers," which allow solo carpool-lane access for these vehicles.

The limit of 85,000 green stickers was reached last month, but there is still an unlimited supply of "white stickers" for battery-electric and hydrogen fuel-cell cars.

MORE: No More California Carpool-Lane Stickers For Plug-In Hybrids

Ironically, this--along with the rebate income cap--occurs just as several luxury plug-in hybrid SUVs hit showrooms.

Those include the 2016 BMW X5 xDrive 40e, Mercedes-Benz GLE 550e, and Volvo XC90 T8 Twin Engine. An Audi Q7 plug-in hybrid is expected to follow them sometime next year.

They're all likely to be purchased by wealthy buyers who may no longer qualify for a rebate.


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