California is hoping to boost EV sales with a new rebate program (copy)
With the federal tax credit for electric vehicle purchases set to wind down, California is weighing a new rebate program that would continue to promote the purchase of zero-emissions vehicles.
The plan, known as the California Electric Vehicle Initiative, is intended to stave off the so-called "valley of death." Lawmaker in California are concerned that EV sales might plummet once there is less of a financial incentive to purchase them.
In order to spur EV sales, the bill outlines a rebate plan that would eliminate the need to buyers to file for a tax credit, as is common practice today. Instead, buyers would get cash back at the time of their purchases. The bill also calls for income-based credits, which would eliminate excessive subsidies for wealthy buyers.
Rebates would be lowered over time as EV becomes more popular. Once electrics move to the mainstream, the program would be eliminated. An exact timeframe has not been attached to the bill, but EVs are expected to reach price parity with internal combustion engine cars sometime around 2026. California is proposing to fund the program with $3 billion.
California governor Jerry Brown has outlined a plan to have 1.5 million electric vehicles on the state's roads by 2025. The new bill could be a crucial tool in helping California reach that goal.