California governor Jerry Brown has called for 1.5 million electric vehicles on the state’s roadways by 2025, but there are only 300,000 of them in the state at this moment. Last year, zero-emissions cars accounted for only 2% of the 2 million new vehicles sold in the state.
The market for electric vehicles is “coming along,” says Steve Chadima, senior vice president at Advanced Energy Economy, a clean energy business association that is co-sponsoring the bill. “It’s just not coming along quickly enough.”
California Assemblyman Phil Ting of San Francisco has introduced legislation that would add $3 billion to the state’s zero-emissions incentive program over the next 12 years. “We’ve been able to dispel the notion that you can’t clean the environment and grow the economy,” Ting says. “The next wave is electric vehicles.”
California Electric Car Initiative
Ting’s bill would create the California Electric Car Initiative. In essence, the program is designed to achieve price parity between zero-emissions cars and conventional cars. For instance, claims the San Jose Mercury News, if a given electric car costs $40,000 but a similar conventional car costs $25,000, the state rebate could be up to $7,500. Add that to the federal tax credit of $7,500 and the cost to the consumer is the same. The thinking is that if a person can buy a zero-emission vehicle for the same price as a car with an internal combustion engine, more people will opt for the ZEV over a conventional car.
The plan will target lower-income Californians and includes expansion of EV charging infrastructure, particularly in the state’s more densely populated urban areas. It may also provide incentives to purchase used cars that qualify for low- or zero-emissions status according to the rules laid down by the California Air Resources Board (CARB).
Rebates in the state are capped according to income. After a study last year found that 80% of the money the state spent on EV rebates went to wealthy residents, the program was amended to make single people with taxable incomes higher than $150,000 a year or married couples with taxable income of more than $300,000 ineligible for the incentives. If you think $150,000 is a lot of money, in California it is like living at the subsistence level.
How Will It Be Funded?
Since 2010, California has provided a total of $420 million through the state’s existing low and zero emissions incentive program, which is funded by the state’s cap and trade system for carbon emissions. That system has failed to meet expectations, according to the Los Angeles Times, and is subject to being completely revamped. Spending state money is easy. Paying for programs is hard.
The present rebate system is subject to being suspended each year if the money to fund it from the cap and trade program is exhausted. Ting’s bill would keep the program going regardless of how the cap and trade system works, making it easier for customers to plan their next car purchase, knowing the incentives provided by the Electric Car Initiative will be available all year.
A Jolt For The EV Market
Ting’s bill “will jolt the EV market to the mainstream,” says Dan Lashof, chief operating officer of NextGen Climate America, one of several environmental groups backing the legislation. Some of the proposed rebates will be available at the time of purchase, meaning customers will get the cash reward immediately rather than waiting up to a year to file their taxes and get their refund.
Ting’s bill will need to be approved by both houses of the California legislature before becoming law. If passed, the first rebates under the new Electric Car Initiative are expected to be available beginning late next year.