California considers boosting electric-car rebate to $4,500


Chevrolet Bolt EV being charged outside Go Forth electric-car showroom, Portland   [photo: Forth]

Chevrolet Bolt EV being charged outside Go Forth electric-car showroom, Portland [photo: Forth]

The California Air Resources Board will discuss Thursday and Friday raising the state's electric vehicle rebate to offset the expiration of federal tax credits for the two largest electric-carmakers, Tesla and GM.

The state offers a $2,500 subsidy for electric-car purchases. CARB is considering raising that amount to $4,500, according to Bloomberg.

READ MORE: Tesla sells 200,000th car, starting phaseout of federal tax credits

Twice, the program has run out of money, and subsidies have been reduced or delayed.

Now, revenue from the state's Low Carbon Fuel Standard can provide funding for the additional electric car rebates. Funding for the current program comes from the state's carbon cap-and-trade program.

The discussion comes as the two largest makers of electric cars in the U.S., face the expiration of federal $7,500 tax credits on their cars.

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The federal tax credits, passed by Congress in 2007, wind down on each automaker's plug-in models after the automaker sells 200,000 plug-in cars.

Tesla reached that threshold in June. General Motors is expected to reach it at the end of September or in early October. Once an automaker reaches that threshold, its buyers continue to get the full $7,500 tax credit through the end of that quarter, then receive half the credit for another six months and a quarter credit for the following six months before it disappears entirely.

A bill introduced in the U.S. Senate last week aims to extend the federal credit for 10 years. A parallel bill is pending in the House, but neither has made it out of committee.

READ THIS: California warns it won't follow lower EPA fuel economy, emissions rules

Currently, electric-car buyers in California are eligible for a $2,500 rebate by mail after they purchase an electric car, with qualifications for income, battery size, and cost.

The new proposal, supported by automakers, utility companies, and other electric-car advocates, would move the subsidy to a point of sale rebate that consumers could use to reduce the up-front cost of buying an electric car, including the amount of financing needed.

The move comes as California faces threats from Washington to eliminate its right to set its own emissions standards for cars. As part of a joint proposal from the EPA and NTHSA to roll back planned increases in fuel-economy standards that automakers and California agreed to in 2009, the EPA proposed to end the waiver that gives California that right, and NHTSA made a legal claim that the right is invalid.

California, along with 16 other states and Washington, D.C. have sued to block the proposal, and California has said it will continue to set its own standards even if the new regulation proceeds. Those issues will also be part of the CARB discussions this week.

 
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