California to cap electric vehicle rebates at $60,000

California’s subsidies for electric cars and plug-in hybrids will change this December. Only electric vehicles up to a price of USD 60,000 will be eligible for the grant, except hydrogen cars. But this is not the only change.

The programme’s rewriting is an attempt by the California Air Resources Board (CARB) to benefit lower-income communities rather than wealthy buyers. So apart from the cap mentioned above at 60,000 dollars (MSRP) for electric vehicles, plug-in hybrids with a range of fewer than 35 miles (56 km) won’t be eligible for funding any longer.

Moreover, all rebates will be reduced, at least for high earners above the low-to-moderate income threshold. Standard rebates for fully electric vehicles that qualify will be reduced from $2,500 to $2,000, while the refund for longer-range plug-in hybrids will drop from $1,500 to $1,000. Rebates for fuel-cell vehicles will fall from $5,000 to $4,500.

Rebates for low- to moderate-income buyers will stay at $4,500 for EVs, $3,500 for plug-in hybrids and $7,000 for fuel-cell vehicles. Also, any grant is now a once in a lifetime event whereas before people could apply twice. The new rule will not be applied retroactively.

The new price cap at 60,000 dollars excludes premium electric cars such as the Audi e-tron quattro, the Jaguar I-Pace and other models from BMW, Mercedes-Benz and Tesla (Model S and Model X) from funding in future. A list of the plug-in hybrids still eligible for funding is to be published in the coming weeks.

Also, fleet owners will have to deal with changes. The so-called reduced ownership amounts for car share and rental fleets will be reduced to $1,800 for fuel cell cars, $800 for all-electric or range-extended vehicles and $400 for PHEVs. CARB also announced that all-electric motorcycles would no longer be eligible for rebates in the rental category.

California launched the Clean Vehicle Rebate Project (CVRP) in March 2010. To date, 346,423 rebates have been approved for all-battery electric or plug-in hybrid vehicles, according to the Center for Sustainable Energy, with a funding of more than $773.5 million. A sum, that bursts the current budget as Melanie Turner, spokeswoman for the project, told the LA Times.

California’s battle to clean up their air quality has seen an investment of almost 1.2 billion dollars over the past five years. The large scale approach has been effective in addressing more isolated communities, as well as providing “investments [which] are an essential element in the state’s transition to a low-carbon economy and meeting 2030 GHG emissions reductions targets of 40 per cent below 1990 levels,” according to CARB. This target translates to the stated goal of getting five million zero-emission vehicles on the road by 2030. There are currently 600,000 electric cars on the street in California.

The changes to the Clean Vehicle Rebate Project (CVRP) will take effect on 3 December 2019.

latimes.com, cleanvehiclerebate.org (CARB rules)