California may lose its status as the beacon for electric vehicle purchase incentives, at least for now.
The California legislature has passed a new budget, awaiting Governor Jerry Brown’s signature, which cuts off funds for the state’s clean vehicle subsidies. These subsidies would include consumer rebates for electrified vehicles, “environmentally friendly” heavy trucks, and other clean vehicle incentive program. That will mean the end of the state’s well-known EV rebate program, unless a deal is worked out in Sacramento.
Car buyers wanting to tap into the state’s clean-vehicle program to reduce the price of their EV purchase will have to wait and see what happens in the state government. For now, those interested in the incentive program are being placed on a waiting list.
According to a recent Los Angeles Times report, the disappearance of EV rebates appears to be influenced by how the state is spending funds generated by its cap-and-trade program. California’s cap-and-trade auction credit system requires businesses like oil refineries and manufacturers to buy permits based on how much they pollute.
Governor Brown announced in January that he expected to see $500 million from these funds spent on low-carbon transportation programs, including $230 million on the low-emission vehicle rebate program for consumers. It would also have included another $30 million to be spent on EV incentives for low-income residents in the San Joaquin Valley and Los Angeles.
The state’s cap-and-trade fund saw “significantly lower than expected” revenue from the last auction sale, according to comments made recently by a Brown administration finance official to a legislative budget committee. However, the state had previously stockpiled $1.4 billion in the fund.
Some environmental advocates believe the governor is holding onto the low-carbon funds as an incentive for lawmakers to reach a deal this summer on extending the life of the cap-and-trade program. That state program is facing legal questions over whether it can keep operating past 2020. Governor Brown does want a new law adopted to ensure the program’s future, and has endorsed an extension through new legislation.
“An extension will not only provide market certainty, but will ensure ongoing funding for clean-energy programs, especially in vulnerable communities,” Brown spokeswoman Deborah Hoffman told The Los Angeles Times.
Senate leader Kevin de León (D-Los Angeles) was recently quoted, saying that the funds that are available should be spent as soon as possible. “Every time we don’t spend money, more carbon is emitted into the atmosphere,” he said.