$3 Billion in Frontloaded EV Buyer Incentives Would Decline as State’s EV Market Grows
Facebook Live announcement footage available here.
San Francisco – 1.5 million electric vehicles (EVs) will be on California roads by 2025, and 5 million by 2030, with the help of a new rebate program created by legislation announced by Assemblymember Phil Ting (D-San Francisco) that faces votes in two State Senate committees next week.
“Electric cars are the future. We have reached a tipping point and it’s time to give the electric car revolution an aggressive boost,” said Ting. “California’s ambitious goals to reduce climate altering emissions require transportation electrification. We need an incentive program to get everyone behind the wheel of an electric vehicle.”
Assembly Bill (AB) 1184 creates the California Electric Vehicle Initiative (CEVI). It would provide point-of-sale rebates to EV buyers, with the rebate value scaled down as state EV sales hit certain milestones until 2030. The goal is to create a self-sustaining market for EVs by that time when half of the state’s power is set to come from renewable sources. This frontloaded approach is modeled after the successful California Solar Initiative, which provided rebates for solar power installations that declined over time as the industry grew and technology costs came down. The solar program was such a success in transforming the solar market that more rooftop solar has been installed since the program ended.
CEVI rebates would be redeemed at car dealerships, reducing the sale price right at the time of purchase and eliminating the need to file tax rebates with the state. They would be valued initially to make the cost of battery-powered vehicles comparable to similar models of gasoline-powered vehicles, after federal and other credits. Also, under Ting’s bill, rebates would operate on an income scale, with low-income buyers eligible for bigger rebate amounts. The program would be administered by the Air Resources Board, in coordination with the California Public Utilities Commission and the California Energy Commission. Its $3 billion worth of incentives would come from a portfolio of taxpayer-neutral sources. The bill also calls for investing $500 million per year in cap and trade program funds set aside to ensure that disadvantaged communities, school and transit buses, and freight benefit from the transportation electrification.
"California now has the opportunity to live up to its reputation as a leader," said Tom Steyer, Founder and President of NextGen Climate that is a co-sponsor of AB 1184. "In order to seriously combat climate change, we need to invest in electric vehicles and create good-paying clean energy jobs that will promote economic prosperity and help safeguard public health. California leaders should support this plan to keep our state moving forward."
“The California Electric Vehicle Initiative will get us where we need to go, as drivers, as a state, and as a country,” said Steve Chadima, Senior Vice President of Advanced Energy Economy, a national business association that is active in California, and a co-sponsor of AB 1184. “By starting with substantial incentives then reducing them as sales grow, California can give both EV manufacturers the certainty they need to build and sell vehicles and EV customers the incentive to buy now rather than wait for prices to come down as the market matures. Before long, car buyers will wonder what took them so long to go electric.”
"We can't rely on Congress or Donald Trump to extend federal tax incentives for EVs, which will start running out next year for the leading EV manufacturers,” said Max Baumhefner, Attorney at the Natural Resources Defense Council. “California can fill the void by acting now, helping everyday drivers ditch the pump and make the switch to cleaner, cheaper electricity."
"The California EV Initiative is an important step in meeting California’s important climate goals. By offering upfront rebates to lower the costs of EVs the initiative targets the primary barrier to EV adoption for low and moderate-income Californians without adding additional costs to consumers utility bills,” said Mark Toney, Executive Director of The Utility Reform Network. “The declining rebate structure of the program will help jumpstart the EV market and eventually lower the price of EVs similar to the impact of the California Solar Initiative on the solar market and solar panel costs."
"By connecting low-income and underserved households to rebates, the California Electric Vehicle Initiative creates opportunities for our communities to own and use zero emission vehicles," said Eddie Ahn, Executive Director of Brightline Defense, a public policy organization representing a coalition of eight environmental and workforce justice advocates and service providers throughout the Bay Area. "Lack of awareness and uneven access to electric vehicle incentives have been longstanding barriers for so many. In addition to decreasing air pollution that disproportionately affects low-income communities, we're excited by the electric car revolution revving up in Bayview-Hunters Point and many other underserved communities across the state."
Transportation accounts for 40 percent of California’s greenhouse gas (GHG) emissions. California has set ambitious goals to reduce GHG emissions by 40 percent below 1990 levels by 2030. There are nearly 300,000 EVs on California roads today. In 2016, approximately 2.09 million new cars were sold in California and 1.9 percent were EVs. Over 20 EVs are now on the market in subcompact, hatchback, sedan, luxury, and SUV/minivan models.
Further information about AB 1184 is available online at www.leginfo.legislature.ca.gov.
Contacts: Anthony Matthews (Ting), tel. (916) 319-2019
Susan DeVico (Advanced Energy Economy) – tel. (510) 339-1527
Will Simons (NextGen Climate) – tel. (415) 802-2423