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California bill could triple rebates for electric car buyers

SACRAMENTO — California could triple the rebate it gives to drivers who purchase zero-emission cars under a San Francisco lawmaker’s bill that seeks to put the state on track to meet its goals to combat climate change.

Democratic Assemblyman Phil Ting’s bill, AB1046, would let state regulators increase a typical consumer’s rebate for an electric car to up to $7,500 and provide a stable pot of funding for the payments.

Ting said his bill would promptly boost rebates and reduce them over time, as electric vehicles such as Teslas and Chevrolet Bolts presumably grow in popularity.

California’s existing rebate program gives buyers a flat $2,500 for full-battery electric vehicles. Ting said that gives buyers no incentive to go electric now versus years down the road.

The state needs to do something to boost sales because it’s not on track to hit its goals for reducing greenhouse-gas emissions, Ting said. A report last year by the state Air Resources Board identified rising passenger vehicle emissions as the main reason for the state’s problem.

“If we don’t individually move into clean cars, there’s no way we’re going to get there,” Ting said. “Even if we did great on everything else but clean cars, we’re just not going to do it.”

The revamped bill, which Ting introduced late last month, faces a hearing Tuesday in the Senate Transportation Committee. It still must pass the full Assembly and Senate.

Transportation accounts for about 39% of greenhouse gas emissions in California, and the vast majority of that comes from passenger cars. The state hopes to cut overall emissions to 40% below 1990 levels by 2030.

Even though electric-vehicle sales have surged in the Bay Area, Ting said, the state needs to ramp up incentives if it’s serious about fighting climate change.

Dan Sperling, a member of the Air Resources Board and founding director at the Institute of Transportation Studies at UC Davis, said the bill would eliminate a stumbling block that’s limited the success of the rebate program: the state’s dreaded waiting list.

Currently, funding for electric car rebates runs out every fiscal year, forcing buyers to wait for a rebate until state leaders authorize more funding.

Sperling said that uncertainty leads some car dealers to avoid mentioning the rebate program because they aren’t certain that customers will get their money. The bill would make the state provide an uninterrupted funding source for the rebates.

“If you don’t know if you’re going to get the money and nobody tells you about it, that’s not an effective program,” Sperling said.

California’s goal is to have 5 million zero-emission vehicles on the road by 2030. There are now an estimated 550,000 such cars in the state, including electric and hydrogen-fuel-cell vehicles.

Ting’s bill would leave it to the Air Resources Board, the agency that regulates air pollution and climate initiatives, to fill in many details of his proposal. For example, AB1046 does not specify the exact amount of the new rebates or how quickly they would decrease. The bill would direct the board to set rebates with some guidelines:

• Buyers of electric and hydrogen-fuel-cell cars could receive up to $7,500 per vehicle. If the state sets that rebate at that ceiling, it would triple the amount available to a typical consumer buying an electric vehicle.

• The board would have to come up for a rebate amount for purchasers of plug-in hybrid cars such as the Honda Clarity, some Toyota Priuses and the soon-to-be-discontinued Chevrolet Volt, which run on gasoline when their electric batteries are spent. Most plug-in hybrid buyers now receive a $1,500 rebate.

Ting said he doesn’t see a need to subsidize the “intermediate technology” of hybrids in the future, noting that the cars don’t have a long battery range.

The plug-in Prius, for example, goes about 25 miles before its gas generator engine kicks in. The Chevy Bolt’s all-electric range is 238 miles.

Ting said it’s also necessary to increase rebates for all-electric vehicles because the two largest manufacturers, General Motors and Tesla, are close to running out of their federal tax credits. The credit starts to phase out after a company sells 200,000 zero-emission cars to U.S. buyers. California’s higher rebates could offset some of those lost dollars.

While Ting’s plan would increase rebates, it’s unclear how the state would pay for the accelerated effort.

Ting said the bill would allow the state to borrow money to create a fund so it can provide continuous rebates without a waiting list. The Air Resources Board could use existing revenue sources to repay the money it borrows.

The bill prohibits the board from increasing taxes or using money from utility customers.
