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California tightens availability of EV credits

13 November 2019 Stephanie Brinley, MBA

(Excerpt)

The US state of California has tightened the availability of electric vehicle (EV) credits, and the changes may leave some premium EV buyers unable to access the credits. The California Air Resources Board has approved changes to its clean vehicle rebate project , with effect from 3 December. In a post to its website, the CARB stated, "If the CVRP rebate was important in your decision to purchase an electric vehicle, we encourage you to apply as soon as possible and prior to the new program changes taking effect." Among the changes are that the availability is now reduced from two rebates per any single entity or business to only one; anyone who may have already met the limit is not eligible for one more, but those applying after 3 December are eligible for only one. The programme used to allow an 18-month window from EV purchase to submission of an application for the credit; this is reduced to three months. There is also a new cap on the manufacturer's suggested retail price of USD60,000 for a vehicle to qualify, with the exception of fuel-cell EVs . In addition, the urban dynamometer driving schedule of the all-electric range is increased from 20 miles to 35 miles, which means any plug-in EV or hybrid vehicle with an electric-only range of less than 35 miles will not qualify. There are no changes to the amount of a buyer's income to be eligible, but verification is required for all members of a household aged 18 and higher, instead of 17 and higher. For low- and moderate-income households, the rebate amounts are unchanged (called Increased Rebate in the programme). However, the Standard rebate amount has been reduced to USD4,500 for an FCEV; USD2,000 for a battery or range-extended EV; USD1,000 for a plug-in hybrid EV (PHEV); and USD750 for a zero-emission motorcycle (ZEM). The reductions are USD500 per vehicle category (USD150 reduction on motorcycles). The increased rebate remains USD7,000 for an FCEV, USD4,500 for a battery EV, and USD3,500 for a PHEV (motorcycles do not qualify for an increased rebate).

Significance: The CARB said the CVRP change had been made "to ensure this year's funding allocation provides a meaningful incentive to encourage EV purchases while maintaining a programme that is viable for a longer portion of the upcoming year". The most significant change is to the cap on MSRP, which was not included in the earlier vehicle eligibility criteria. The change makes the Tesla Model S and Model X ineligible, as well as the Audi e-tron, which has an MSRP of USD74,800, and the upcoming Porsche Taycan. The US pricing of the Mercedes-Benz EQC has not been confirmed yet, although this change may affect that decision. While owners looking for a vehicle in this price range may not need the incentive to afford an EV, it may be factored into their willingness to buy such a model. It is unclear at the time of writing if the other US states following California's lead on emissions regulations will follow its lead on the availability of EV incentives.


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