$1,000 Illinois fee? State fees, credits can make or break EV sales


National Drive Electric Week 2018, Boulder, Colorado [CREDIT: NDEW, Diego Lopez]

National Drive Electric Week 2018, Boulder, Colorado [CREDIT: NDEW, Diego Lopez]

Among states, incentives for electric cars vary wildly—from Colorado, which offers a $5,000 tax credit for EV buyers, to Illinois, where the legislature just proposed a $1,000 annual registration fee for electric cars. 

As states implement—or discontinue—various EV incentives, the effect on sales has been dramatic. For example, Georgia used to be one of the leading states for EV sales when it offered a $5,000 tax rebate, then sales collapsed when the rebate expired. Similarly, Washington State has alternately been among the EV sales leaders as its incentive programs have arrived and lapsed.

And automakers recently launched a campaign to get political leaders in more Northeastern states, where EV sales are mandated, to get on the incentive bandwagon to get more consumers to choose them.

Against this backdrop, here are some new incentives—or disincentives—from several states.

Georgia state capitol (pic by Andre M. via Wikimedia)

Georgia state capitol (pic by Andre M. via Wikimedia)

- In Illinois, the legislature last week proposed a new $1,000 annual registration fee directed only at electric cars to ensure that EV drivers contribute to the state's road maintenance, which is normally funded by gas taxes. New cars, which average about 15,000 miles a year and 24 mpg, would only pay about $274 a year in gas taxes in the state, plus a $148 registration fee (up from $98). In that light, it's hard to see the proposal as anything but a punitive measure against electric cars.

- Similarly, the North Dakota senate in December passed a $110 "road use fee" for electric vehicles, again to support the state's road maintenance fund. At least that's far less egregious than the Illinois proposal and seems more in line with what gas cars already pay. The fee for hybrids is $50. 

- Washington State, which long waived sales taxes on electric vehicle purchases, put a cap on them in 2017 and ran out of the incentives last June. It's reinstated the tax break starting Aug. 1, 2019. It also, however, jacked up registration fees on electric cars by $75 to make up for lost gas-tax revenue.

- In 2017, neighboring Oregon also passed its first $2,500 EV rebate.

- The most ambitious new plan came from New Mexico late last year, where Governor Michelle Lujan Grisham followed California's lead in passing a measure to bring 100 percent renewable power to the state by 2045. As part of the program, New Mexico would join California's Low Emissions Vehicle program, including its mandate for Zero Emissions Vehicle sales. The plan makes New Mexico only the third state after Hawaii and California to adopt a zero-carbon power plan to fight global warming, though Minnesota, Washington, and Colorado also have plans in the works.

2019 Chevrolet Bolt EV at Whole Foods, Frisco, Colorado

2019 Chevrolet Bolt EV at Whole Foods, Frisco, Colorado

These plans all come on top of the federal tax credit of up to $7,500 for electric cars.

By coordinating with other nearby states in a region, state leaders can encourage a wider selection of EVs and draw more electric-car sales. And selling more electric vehicles could help bring battery prices down to parity with internal combustion engines. Then electric cars won't be just a game of who can provide the highest tax incentives (or disincentives.)

 
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