CARB $60,000 EV rebate limit chart

In California, electric vehicles have been selling so well that the California Air Resources Board (CARB) is discussing ways to reduce the amount spent on the state's Clean Vehicle Rebate Program (CVRP). The program, which provides rebates to EV buyers, is $30 million in debt this year, according to the Capitol Weekly. A new discussion document that was presented at CARB's April 3 meeting lists two main ways that the state could save money while still supporting EV sales.

There could be a $60,000 price limit on plug-in vehicles that CARB would subsidize.

Option one is to reduce the rebate by $500, which would mean pure EVs would get $2,000 and plug-in hybrids would get $1,000. The other option would be to put a $60,000 price limit on plug-in vehicles that CARB would subsidize. Currently, this would only affect two vehicles: the Tesla Model S and the Cadillac ELR. You can find the details in this PDF; see pages 20-23 for discussion on reducing the rebates.

CARB's numbers show that cutting the rebate by $500 would result in "only a minimal short-term impact in the growth of sales of eligible vehicles." The benefit would be that," the budget savings associated with the short-term market delay will more than offset this impact by providing rebates for about 41 percent more vehicles during fiscal year 2014-15 under a fixed budget." As far as limiting the rebate to vehicles that cost less than $60,000, CARB makes the obvious point that, "rebates are more effective in influencing purchase decisions related to vehicles with a MSRP lower than $60,000." CARB thinks this limit will impact no more than two percent of the EV market, "but will allow the program to be more effective in influencing consumer purchase decisions."

Plug In America does not support CARB's proposal. PIA's senior policy advisor, Jay Friedland, told AutoblogGreen that:

At this early point in the market, Plug In America is working hard along side a coalition of automakers, NGOs, utilities and consumers to maintain the CA Clean Vehicle Rebate at current levels with all vehicles included. Tesla is a leading California EV manufacturer - and has been indispensable to creating the market generally - and should not be excluded from the program. Every EV reduces pollution for kids and adults alike and our dependence on petroleum.

We asked Tesla for a statement, but have not heard back. The company told the Capitol Weekly that the proposed changed would "jeopardize the purchase of more than 2,500 Tesla vehicles in the state" and possibly slow down manufacturing.

*UPDATE: This article originally stated that the CVRP funds are used to give out tax rebates. They are actually just rebates.
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