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California Considers Boosting EV Incentives To $4,500

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In the US, electric cars have long enjoyed a sizable tax credit from the federal government to help spur adoption. However, as EVs have started to gain momentum, there is a big problem: the government designed the tax incentive to go away. After automakers like General Motors and Tesla sell 200,000 electric vehicles, the incentive cuts in half, then in half again, then disappears. So, California is considering doing a little something to help out.


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The California Air Resources Board is considering whether or not to boost the state’s electric vehicle rebate. Right now, the state offers a $2,500 subsidy for EVs, but CARB is considering a boost up to $4,500. CARB is also deciding whether to make the new incentive a point-of-sale rebate to just lower EV prices when the buyer gets the car, rather than mailing out checks after the fact (something they have been testing for a while).

Basically, this is to make the loss of the federal credit less painful for electric car buyers. Meanwhile, the federal government is mulling over a bill to extend the nationwide tax credit, but the proposal hasn’t made it out of committee yet.


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Funding has been a problem in the past for California’s EV rebates. The state actually ran out of money in the system two times, forcing it to delay or reduce subsidies. However, now the state’s revenue has increased thanks to increasing low-carbon fuel standards, causing companies to buy more credits to comply and avoid fees.

News Sources: Green Car Reports, Bloomberg