California Raises Green Car Rebates For Low-Income Buyers, Cuts Off Top Earners

Yesterday the California Air Resources Board (ARB) voted to increase state rebates to as high as $4,000 for plug-in electrified vehicles and $6,500 for fuel cell vehicles to better subsidize low-income earners, while also setting a limit on the highest earners.

Those in a middle income range will see no changes to state rebates enabling $2,500 for buyers of all-electric vehicles, $1,500 for plug-in hybrid buyers, and $5,000 for fuel cell vehicle purchasers.

The Robin Hood-like gesture followed SB1275, legislation from last year by state Senate President Pro Tem Kevin de León requiring the board to set income-level limitations for those receiving this state-level perk over and above federal tax credit eligibility.

The decision is a response to complaints that rebates – such as the present $2,500 rebate for buyers of all-electric cars like the Nissan Leaf and Tesla Model S – were subsidizing the wealthy and doing nothing for those less fortunate.

ARB’s vote is effectively a $1,500 increase across the program for low-income folks. It raises a $2,500 EV rebate to $4,000, a $1,500 PHEV rebate to $3,000, and a $5,000 FCV rebate to $6,500.

What defines low income or upper income?

Low-income qualifications can be met by those earning 300-percent of the federal poverty level. For a family of four, this is capped at $73,000 reports the San Francisco Chronicle. For a single person household, it is $35,310 says Melanie Turner, public information officer for the California Air Resources Board.

Whether the extra $1,500 will help increase sales is being questioned.

Whether the extra $1,500 will help increase sales is being questioned.

The middle ground of those who make more and who are still eligible for the $2,500 EV credit, $1,500 PHEV, and $5,000 FCV credits is for those earning between $73,000-$340,000.

So, with the ARB setting the upper limit to those earning up to a third of one-million dollars per year, Tesla is not having its customer base overly targeted.

However, said Turner, higher income consumers will no longer be eligible.

“[T]he cap is based on both gross annual income and filing status,” said Turner referring to page 27 of the ARB’s Funding Plan. “The cap is a gross annual income of $250,000 for individual filers, $340,000 for head-of-household filers, and $500,000 for joint filers.”

Underlying these rules is the authority the Air Resources Board has to impose penalties and rewards as it sees appropriate to shift the emissions lower for vehicles sold in state.

Both all-electric cars and hydrogen fuel cell cars are zero-emission vehicles, but FCVs do refuel faster, and provide longer range in many cases.

A similar rationale by the ARB has been seen for its rewarding manufacturers more Zero Emission Vehicle (ZEV) credits for FCVs than EVs.

Toyota MIrai.

Toyota MIrai.

This is true even for cars like the 85-kilowatt-hour Tesla Model S which may travel 270 miles, and has a growing network of Supercharger stations, and is a state startup, no less. It’s been capped at four ZEV credits while FCVs are eligible for nine.

At the upper limit of EV pricing, Tesla’s nationally available Model S starts at $75,750. A Toyota Mirai, for now offered in only California is to start at $57,500.

Buyers and sellers of FCVs are offered the sweetest carrot on a stick to go FCV by the rule makers in California.

And, now, low-income buyers of cars like the Nissan Leaf may also get up to $3,000 For a Ford C-Max Energi, $4,000 for a Nissan Leaf, or $6,500 for a Mirai.

Whether these amounts will spur sales for these types of vehicles remains to be seen. Since 2010, California has handed out 110,000 rebates to qualifying car buyers.

San Francisco Chronicle