California Lawmaker Proposes $3 Billion In Subsidies To Boost EV Market

California has the biggest share of electric vehicle sales in the country, but they're far from reaching the goal of 1.5 million of them driving through the state. In order to reach that, a bill could cut costs with an enhanced rebate system.


May 26 2019, Updated 2:56 p.m. ET

California accounts for nearly half of all United States electric vehicle sales from 2011 to 2016 with 257,937 units. Through 2016, Georgia was the second-biggest state, but they didn’t even hit 10 percent of the total the Sunshine State reached. That number is approaching the 300,000 mark, and it will only get bigger if state legislation passes to increase their incentive program.

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A bill from San Francisco’s Phil Ting could add $3 billion to the state’s zero-emissions movement. California has a goal set for 1.5 million electric vehicles operating on the road by 2025, but it’ll be hard to hit that mark if they can’t significantly ramp up sales. Gas2 reports that in 2016, “only 2 percent of the 2 million new vehicles sold in the state” were EVs.

This new bill will make electric cars much more affordable, especially for those who meet income requirements. State rebates and federal tax credits would be able to shave the price down to traditional new vehicle costs. There could also be additional savings for previously used vehicles that meet at least the low-emission requirements from the California Air Resources Board.

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California’s electric vehicle rebate system, also known as the Clean Vehicle Rebate Project, has recently gone through changes. They put restrictions on income after 80 percent of the state’s wealthy residents (income greater than $100,000) took advantage of it. Now, people must make less than $150,000 in taxable salary to be eligible. Once all the money in the system is used, rebate opportunities would be suspended.

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If Ting’s new bill is passed, the rebate system would always be active and rebates could be redeemed much quicker. Some could be eligible to receive a refund when purchasing the electric vehicle. At the moment, these rebates are given out once buyers file taxes for the year they purchased the EV. Around 115,000 rebates have been issued in the state.

Steve Chadima, Senior Vice President of Advanced Energy Economy, says in a report from The Mercury News that the electric vehicle boom is “not coming along quickly enough,” but this new bill could give EV manufacturers “a dependable market to grow their business.” Ting also made a statement with the bill, saying that we “can’t clean the environment and grow the economy,” noting that “the next wave is electric vehicles.”

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California and the entire United States is lagging behind China, who is dominating the EV market worldwide. Quartz reported back in May that China had over 352,000 new electric cars registered in 2016, which is more than what the large West Coast state has at the moment. Even if China is over-inflating that number, they still had at least 250,000 new cars entering their automotive ecosystem.

There’s still a lot of skepticism with EVs and range remains a big factor, but the needle is moving. Tesla’s continuing to make headlines and they’re about to release the more affordable Model 3, which will ramp up sales in California.


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