California has refreshed its “Clean Fuel Rewards” program, increasing the amount to $1,500 upfront (no application required) and simplifying availability to customers statewide. The new incentive is available for any eligible electric vehicle (including motorcycles!) purchased from a participating retailer starting today, November 17.
As this is a refresh of California’s previous Clean Fuel program, which was a collaboration between the California Air Resources Board and electric utility providers, those previous utility programs will disappear at the end of this year. But other incentives still exist, and until the end of the year, the utility incentives are still active — which means customers who buy before December 31 can double-up and save an extra grand or so.
The new incentive is dependent on battery size, so not all vehicles will get the full credit. Any vehicle with a battery larger than 5kWh qualifies for some of the incentives, and a battery over 16kWh will net you the full $1,500. This means that full EVs will generally get the full incentive, plug-in hybrids will get some percentage of the incentive, and EV motorcycles usually get around a thousand dollars off, too.
Amounts for each vehicle are listed on the Clean Fuel Reward Program’s eligible vehicles list.
For the “ideal” customer, the total savings are quite significant. A low- or moderate-income EV customer who lives in Southern California Edison’s service area and purchases a non-Tesla or GM vehicle can qualify for up to $14,500 in state and federal incentives before the end of the year ($2,000 Clean Vehicle Rebate Project + $2,500 low income + $1,000 SCE Clean Fuel + $1,500 CA Clean Fuel + $7,500 federal tax credit). Other utility customers have slightly lower rebates available ($850), and higher-income households get reduced access to CVRP rebates.
Realistically, it would be hard to qualify both for the full federal $7,500 credit (which is a nonrefundable tax credit, i.e. you need to owe $7,500 in taxes to reduce) and the California low income credit on a purchased vehicle. But in this case, low income customers can lease a car and the lessor will take advantage of the full federal tax credit, passing those savings on in lower lease rates.
Notably, Tesla and GM vehicles do qualify for this incentive, despite the federal tax credit having run out for both of those brands. So while neither qualify for the full theoretical $14,500, you could still get up to $7,000 off each of those vehicles if you qualify for all of the statewide and utility incentives listed above.
There are also some more-local rebate programs available, such as a $500 rebate in the City of Riverside and up to $3,000 in the San Joaquin Valley, so the total might be even higher than $14,500 in some circumstances. And on top of all that, there are still other incentives available for electricity rates (check with your utility for off-peak or EV charging rates), charger installation, additional financing incentives for low-income customers, and the ever-coveted carpool lane access.
Unlike most other incentives, the new Clean Fuel Reward is available upfront, which means no extra paperwork needs to be filed. Your car will simply have $1,500 taken off of the purchase (or lease) price at the point of sale.
One unfortunate change, though, is that previous Clean Fuel Rewards were available on used vehicles, but the new one only applies to new vehicle purchases. So if you’re looking to take advantage of that aspect of the previous utility incentives, you’ll have to buy before December 31.
The funds for the Clean Fuel Reward Program come from California’s Low Carbon Fuel Standard, a program intended to reduce the carbon intensity of fuels used in the state. Utilities that provide low carbon fuels, such as electricity and natural gas, earn credits which they can sell to polluters and are directed to return the money from those credits to benefit current and future EV customers.
The standard was the first in the world of its kind, adopted in 2007 under Republican Gov. Schwarzenegger as a response to AB 32, California’s Global Warming Solutions Act of 2006. This law set a target to reduce California’s emissions to 1990 levels by 2020. California then hit this target in 2016, four years early.
Over the years, California has modified the way they return these funds to the people, generally leaving it up to the utilities to figure out how to distribute them. Utilities each had their own program to offer EV rebates to their customers until now, as the programs have been harmonized and offered to customers across the state. This new plan is expected to last for the next three years, though circumstances could change.
While incentives are great for EV adoption, they’re often very confusing. As you can tell from the calculations above, there are lots of incentives in various areas, and most of them need to be filed for separately.
So this incentive, which is upfront and requires no paperwork, is a great step forward. This is what we need, and what the federal incentive should have been in the first place (President Obama floated the idea of increasing the federal incentive to $10,000 and making it upfront, but Congress didn’t take him up on it).
Now, instead of advertising a vehicle as “$30,000 with up to $14,500 worth of incentives,” a dealership can advertise the car as “$28,500 with up to $13,000 of incentives.” It’s not a big change for those who know about the incentives, but for people who don’t, they’ll see that lower starting price and it will compare more favorably to the gas vehicles they might be considering.
This should help adoption, especially if other incentives follow this example. If California made the CVRP available upfront ($2k), and the federal government fixed the federal credit ($7.5k), we could see that same $30,000 vehicle get advertised as a $19,000 one – which is bound to bring more customers into the fold.
So let’s hope for more reform on other rebates, and save everyone the paperwork and trouble of seeking them out.