After a rescinding of state-level alternative-vehicle subsidies in December 2012, Colorado residents are again eligible for potentially sizable financial incentives toward the purchase of all-electric, plug-in hybrid electric, and compressed natural gas vehicles.
In the case of plug-in electric vehicles (PEV) including hybrid and all-electric by the legislation’s definition, the amount of the rebate a person would be eligible to receive could be as high as $6,000. The refundable incentive is based on a calculation that takes into account the vehicle’s battery capacity, in kilowatt-hours.
This incentive can be stacked on top of the $7,500 federal plug-in vehicle tax credit and was made possible with the May 15 signing of HB 13-1247 known as the Innovative Motor Vehicle Income Tax Credit by Colorado Gov. John Hickenlooper.
The bill (linked above) was sponsored in the state House of Representatives by Rep. Crisanta Duran (D-District 5) and by State Senator Michael Johnston (D-District 33), and followed lobbying by Colorado auto dealers, manufacturers, and consumers in favor of alternative energy transportation.
Not surprisingly, auto dealers are attempting to publicize the deal now, and encouraging buyers to seek help from their dealerships’ finance and insurance departments in beginning the paperwork to be filed for the tax credits. The arrangement should prove mutually beneficial for seller and consumer when contemplating a new plug-in car, such as the Chevy Volt, or other eligible car. The paperwork would actually need to be completed by the consumer or a tax professional, and dealers so-willing to lend a hand are only able to get the paperwork started.
According to Johnson, In July 2012, when a similar previous law was ruled ambiguous, and incentives were halted, there were close to 1,300 registered PEVs and approximately 70 public charging stations in Colorado.
On his Web site, Johnson notes “there are currently 11 PEV models available in the state, the most seen in the history of the market, and he explains excessive costs to be compensated for with the legislation:
With the tax credits available (through 2015 currently), Coloradans would pay an additional $275-$2,400 for a PEV instead of a comparable internal combustion vehicle (ICE). By 2017, the price difference without taxes is expected to be $3,600-$11,000. The tax credit defined in this bill helps consumers to purchase cars they otherwise might not. As a consequence, they can recoup the savings on gasoline by approximately $1,319 per year, and a savings of $244 per year on maintenance costs. According to one survey, if the PEV purchase price were the same as a comparable ICE vehicle, 60 percent of consumers would consider purchasing the PEV. When that purchase price is higher, only 26 percent would consider purchasing the PEV.
The financial impact for the new Colorado incentives from the tax credit extension is estimated by the state at $2.4 million in fiscal year 2012-13, $5.2 million in FY 2013-14, and $5.9 million in FY 2014-15.
At present 27 states and Washington, D.C. offer some form of additional subsidies, and 13 have legislation pending for hybrid vehicles.
In addition to Colorado, California and Pennsylvania, provide rebates for people who buy hybrids, according to Johnson. Maryland, New Mexico, Oregon, South Carolina, and Washington provide tax credits or exemptions and he noted at least nine other states provide non-financial incentives for hybrids.