Calif. Offers Up to $20,000 Rebate to Buy, Lease an EV; Excludes Federal Tax Credit
By Scott Doggett March 17, 2010
By Scott Doggett, Contributing Editor
In California, home to one in 10 Americans and some of the nation's worst air pollution, the cost of buying or leasing a zero-emissions electric vehicle just became up to $20,000 cheaper.
That's in the form of a tax rebate that's in addition to a tax credit of up to $7,500 that the federal government is offering prospective buyers of electric-drive vehicles.
The state rebates became available to Californians who purchased or leased new EVs in the Golden State beginning this past Monday. The rebates will continue until April 30, 2012, or until the $4.1 million appropriated by the state's Air Resources Board runs out, whichever comes first.
The list of eligible models: One Smith and two EVI commercial vans ($20,000 rebate); the Tesla Roadster, Honda FCX Clarity and Nissan Leaf ($5,000); five neighborhood electric vehicles from GEM and two from Miles EV ($1,000-$1,500); and two zero-emission motorcycles from Zero ($1,500).
The rebate announcement thrilled major electric-vehicle advocates, including Jay Friedland, legislative director of Plug In America.
"We applaud the California Air Resources Board for the leadership it is demonstrating with this program," he said. "The state is making a wise investment in our future."
California is broke. $4.1 million could buy a lot of textbooks in a state where some teachers have taken to buying school supplies because otherwise there wouldn't be enough. Is allocating the money to bring the cost of EVs down the wisest investment in the state's future? That's debatable.
But more to the point: If cost is the major objection prospective EV buyers have, the state rebate helps. But if there are still other factors preventing people from buying an electric vehicle, then more money on the table isn't that significant.
"It's a little bit like when sports cars go on sale," said Rebecca Lindland, an automotive analyst for IHS Global Insight, said in an interview. "If you have four people in your family, it still isn't going to help you."
Her point: If an electric car doesn't fit your lifestyle, it could be competitively priced at, say, $20,000 and you still wouldn't buy it. If you don't have a place to plug an EV in every night, the rebate doesn't matter.
The rebate helps people who are already looking to buy an electric vehicle, she said.
As we reported earlier today, although company executives repeatedly suggested that the price of the 2011 Nissan Leaf coming to the U.S. market later this year would be comparable to a loaded Honda Civic - plus its fuel bill - it now appears the EV will be priced around $40,000 when it goes on sale in Japan later this year.
That amount doesn't include the $100 or so Nissan intends to charge to lease batteries to Leaf buyers in Japan. Nissan plans to sell or lease car and battery as a package in the U.S., so even though vehicles typically tend to cost bit more in Japan, in this case the Leaf can be expected to cost as much in the States.
The $7,500 federal tax credit and the $5,000 state rebate would the price of the vehicle down to $27,500, which would no doubt be low enough to swing some fence-straddlers into the EV ownership realm.
As David E. Cole, chairman of the Center for Automotive Research in Ann Arbor, Michigan, put it: "All of the early vehicles will be very costly and pricey so any help from the state could accelerate the deployment of the technology. Ultimately, the cars will have to fly on their own without incentives."
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