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Published on June 19th, 2016 | by James Ayre


California Electric Car Rebate Is Done (For Now, At Least)

June 19th, 2016 by  

Originally published on EV Obsession.

California’s electric vehicle rebate program has had its cash-flow cut off, for the time being anyways, according to recent reports from EV buyers.


The Golden State’s new budget, still awaiting Governor Jerry Brown’s signature, was approved Wednesday and includes nothing for the state’s many vehicle subsidies (for electric vehicles, “environmentally friendly” heavy trucks, etc). Seemingly, this spells the end of the state’s electric vehicle (EV) rebate — at least until some kind of deal or workaround is put together.

For the time being, the state’s clean-vehicle program is simply putting those interested in rebates onto a waiting list.

So, what’s the reason for dropping of the rebate, and the other incentives as well? Wasn’t the plan that Governor Brown revealed back in January supposed to see $500 million spent on low-carbon transportation programs over the next year (including $230 million to be spent on the low-emission vehicle rebate program for consumers, and a further $30 million to be spent on electric vehicle incentives for low-income residents in the San Joaquin Valley and Los Angeles)?

Apparently, the issue is that the revenue expected from the most recent cap-and-trade auction in the state didn’t come through. The auction saw “significantly lower than expected” revenue, going by comments made recently by a Brown administration finance official to a legislative budget committee.


The Los Angeles Times provides some background:

Unlike most budget cuts, the decision to slash funding isn’t due to a lack of money. California’s greenhouse gas reduction fund gets its cash from auctions that are part of the cap-and-trade program, which requires businesses like oil refineries and manufacturers to buy permits based on how much they pollute.

Although the latest auction of permits produced almost no revenue, the state had previously stockpiled $1.4 billion in the fund. Some of that cash is left over from last year, when the governor and lawmakers were unable to reach an agreement on how to spend it.

Environmental advocates are growing increasingly frustrated that the dollars aren’t hitting the streets. Some believe the governor is holding onto the money as an incentive for lawmakers to reach a deal this summer on extending the life of the cap-and-trade program, which is facing legal questions over whether it can keep operating past 2020.

…A Brown administration spokeswoman didn’t directly address questions about the use of existing climate change dollars as leverage to extend the program. But the governor does want a new law to ensure the program’s future and he endorsed an extension through new legislation.

“An extension will not only provide market certainty, but will ensure ongoing funding for clean-energy programs, especially in vulnerable communities,” is what Brown spokeswoman Deborah Hoffman told The Los Angeles Times.

Senate leader Kevin de León (D-Los Angeles) was recently quoted as publicly stating that the funds that are available should be spent as soon as possible: “Every time we don’t spend money, more carbon is emitted into the atmosphere.”

We’ll keep you posted as updates become available.

(Tip of the hat to “smilepak” on the Tesla Motors Club forum for the news.)

Image by for EV Obsession & CleanTechnica.

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About the Author

's background is predominantly in geopolitics and history, but he has an obsessive interest in pretty much everything. After an early life spent in the Imperial Free City of Dortmund, James followed the river Ruhr to Cofbuokheim, where he attended the University of Astnide. And where he also briefly considered entering the coal mining business. He currently writes for a living, on a broad variety of subjects, ranging from science, to politics, to military history, to renewable energy. You can follow his work on Google+.

  • bwollsch

    Instead of giving the money as a direct rebate to consumers, I would like to see them redeploy this money to build out the charging infrastructure. That would spur EV adoption faster than just reducing the purchase price.

    • Brent Jatko

      Good suggestion. Many prospective buyers might not have any public chargers nearby and also are unable to charge overnight at home.

  • We so admire California as an environmental leader, that we forget that it has the same political wrangles as every other state and that it takes politics to pass good policies. I hope this a short-term gambit to get a long-term law passed.

    • Bob_Wallace

      The political wrangles in California are different from those we see in other states. Both the legislature and governor hold similar goals. But the CA governor is fiscally cautious. He’s not giving into typically “Things are good, let’s spend” type thinking.

      He seems to be trying to build an economy that is not as likely to be disrupted by the normal financial cycles that are outside the state’s ability to control. Build solid programs and put aside enough money during the good times to keep those programs going through the bad times.

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