CA’s new EV rebate plan: Automakers must match funds

from Alejandro LazoCalMatters

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Californians could get immediate rebates on electric vehicle purchases under Gov. Gavin Newsom’s $200 million plan that would require automakers to match state incentives dollar for dollar.

The planwhich the Legislature still needs to approve, lays out for the first time how the governor plans to administer a California-specific rebate program to support a slowing electric car market after the Trump administration rescind federal incentives last year.

The California Air Resources Board will oversee the program, offering rebates at the point of sale to reduce the upfront cost to buyers rather than reimbursing them later. The bill does not specify rebate amounts, which the air board will determine during program development and discuss at a public workshop this spring, said Lindsey Buckley, an agency spokeswoman.

The proposal exempts the program from the state’s usual rulemaking requirements, allowing California to design and launch the rebates more quickly than usual for new programs.

Newsom first revealed the stimulus proposal as part of his Budget plan for January but released a few initial details. State officials gave the subsidy in response to President Donald Trump’s elimination of incentives and disincentives blocking from California’s clean vehicle mandate.

How the discounts will work

Outside experts and clean vehicle advocates said the details raise new questions about how the program will work in practice and who will benefit.

Ethan Elkind, an expert on climate legislation at the University of California, Berkeley, said structuring the incentives as grants allows the state to set conditions that automakers must meet to access the money, giving California leverage over manufacturers.

But Mars Wu, senior program manager at the Greenlining Institute, which advocates for investment in communities of color, said the draft plans fall short of the cap, arguing the proposal does little to ensure the incentives reach the Californians who need them most.

“(The proposal) creates a first-come, first-served free-for-all scenario, which is not a wise use of extremely limited public dollars in a deficit year,” she wrote in an email.

How far could the money go?

The proposal limits eligibility by the cost of the vehicle, not the buyer’s income. New cars qualify only if they are priced at or under $55,000, while vans, SUVs and pickups are capped at $80,000. Used vehicles are limited to a sales price of $25,000. All vehicles must be registered to California residents.

The newly released details also add context to the size of the program. A CalMatters Score of the governor’s original proposal found that $200 million would cover rebates for only about 20 percent of last year’s electric vehicle sales.

Proposed matching funds from automakers could allow the program to reach a larger share of buyers or provide greater discounts at the point of sale, depending on how the incentives are structured.

One clean-car advocate said the details were not yet locked in — including how the rebates might be targeted. Wu said the state can move quickly without abandoning equity by deciding who qualifies in advance while offering dealership discounts. “There is a way to balance fairness and expediency,” Wu writes.

This article was originally published on CalMatters and is republished under Creative Commons Attribution-NonCommercial-No Derivatives license.