California Clean Car Rebate Program On Hold

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[UPDATE, 10/25/16: California’s clean car rebate program has now been funded for 2016-17, and several changes have been made to increase low-income rebates, tighten income restrictions on high-earners and toughen qualifying rules for plug-in hybrids.  See our article here.]


California’s clean car rebate fund has dried up and lawmakers have delayed funding next year’s rebate program, leaving thousands of recent green car buyers as well as current shoppers in limbo about the cash incentives many had counted on.

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The state’s Clean Vehicles Rebate Project ran out of funding for the present fiscal year on June 9 as an increase in PEV sales led to applications exceeding expectations. Buyers are being placed on a wait list.

Now a $500 million allocation to replenish various clean transportation programs has been withdrawn from the new state budget and set aside for further debate. Among the money at stake is $230 million to replenish this year’s clean car rebate funding and to keep the project  going in the 2016-17 fiscal year.

The  clean car rebate program provides $1,500 rebates to buyers of qualified plug-in hybrids, $2,500 to battery-electric vehicle purchasers and $5,000 to buyers of fuel-cell electric vehicles. Eligible low-income purchasers can obtain slightly larger rebates.

It is likely to be late August, at the earliest, before lawmakers decide the fate of the rebate and funding for other programs aimed at putting more clean trucks and buses into service.

Oddly, there is almost $1.4 billion in revenue available to fund the $500 million clean transportation allocation in Gov. Jerry Brown’s original budget proposal for the 2016-17 fiscal year that begins in October.

The state’s Air Resources Board, which administers the funds, had already divided them up, earmarking $230 million for the Clean Vehicles Rebate program and about $150 million for various clean trucking and mass transit propjects.

But lawmakers and the governor’s office apparently decided not to touch that money yet as they debate the future of the state’s carbon emissions permit auction.

The auction, part of the cap and trade program – funds many clean transportation programs.  The governor’s office wants assurances that the auction can continue past 2020 while some in the legislature and business community aren’t happy with it. The most recent auction barely pulled in any money.

The delay comes “at a time when California  still struggles to meet air quality standards and is building momentum in deploying electric cars, trucks and buses,” said Don Anair, deputy director of the Union of Concerned Scientists’ clean vehicles program.

“The over-all delay in allocating funds to the clean transportation program is already causing disruption with new EV buyers being wait-listed for rebates and creating uncertainty with purchasing decisions,” he said. “Decision makers need to recognize delays in spending these funds on vital investments has an impact on technology developers, consumers, and reducing pollution.”

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