Essential Facts about California’s Electric Car Rebates

By · July 29, 2010

Mike Ferry

Mike Ferry, transportation programs manager at the Center for Sustainable Energy, manages California's Clean Vehicle Rebate Project. He's plugging in a Toyota Prius Plug-in Hybrid at Plugin2010 in San Jose.

Government incentives are playing a major role in encouraging adoption of electric cars. In addition to a federal tax credit worth up to $7,500, the State of California is offering a $5,000 rebate for a pure electric car, and $3,000 for a plug-in hybrid. But before you decide which electric-drive car to buy, you should understand the finer points of the rebate program.

Yesterday at the Plugin2010 conference, I spoke with Mike Ferry of the Center for Sustainable Energy, the San Diego-based non-profit that manages the program. As the center’s transportation programs manager, Mike oversees the “Clean Vehicle Rebate Project.” He’s also a biofuels expert and holds a masters degree from UC Berkeley, with a focus on vehicle electrification in California.

Mike explained that the rebates started with California Assembly Bill 118, which passed in October 2007. That bill set aside roughly 200 million dollars per year for programs to reduce petroleum consumption and increase transportation efficiency. Most of the money went to the California Energy Commission. But one-third went to the California Air Resources Board, and a part of those funds focused on consumer incentives for electric-drive technologies. CARB contracts with the Center for Sustainable Energy to run the program.

First, the highlights and then an interview excerpt below:

  • By the time the LEAF arrives in December, there will be about $8 million left in the rebate pool—enough for approximately 1,600 of the expected 5,000 California LEAF customers.
  • California Assembly Bill 118 is funded through 2015, but proposed legislation could be a minor threat to the program.
  • On the day of purchase, you can apply online for the rebate. The money is available on a first-come-first-serve basis. If funds run out before you buy, you are placed on a queue for future funds, if and when they become available.
  • The Nissan LEAF qualifies for $5,000 and the Toyota Prius Plug-in Hybrid qualifies for $3,000. The 2011 Chevy Volt does not qualify all, although it’s expected to receive the necessary certification for the 2013 model year (due in summer 2012).

Brad Berman: How much money was allocated to to the Clean Vehicle Rebate Project?

Mike Ferry: The first year of funding was fiscal year 2009 – 2010. The state operates from July 1 to June 30. The first fiscal year was $4.1 million in funding, which carries through until it’s used up. And then on June 24, the Air Resources Board just approved additional funding for the next fiscal year of $5 million.

So, now there’s $9.1 million available at least until June 30, 2011?

No, until it’s used up.

What vehicles qualify?

Right now, our vehicle eligibility list includes three different medium-duty all-electric commercial vehicles; it includes three different zero-emission motorcycles; and it includes four different manufacturers of low-speed neighborhood electric vehicles. In terms of full function light-duty vehicles, we have the Tesla Roadster and the Honda Clarity, which is fuel cell vehicle, still electric drive.

But you fully expect the Nissan LEAF, as a zero emission vehicle, to qualify.

The LEAF will qualify. By the time, Nissan launches the vehicle in December, it will be on our eligibility list. The day you purchase the vehicle, the consumer is eligible to apply for a rebate.

So, with the sales slip, or leasing document, you can apply? To whom?

You apply to the Center for Sustainable Energy, because the state contracted us to manage the program.

Do you expect Nissan dealerships to have information readily available to their customers to advise LEAF buyers and leasees?

Yes. For instance, a lot of zero emission motorcycles we rebated came from a company called Zero Motorcycles. We worked with them and their dealers so that they have information to give to customers, like where you go on the website to apply. Actually, once you apply online, we take care of everything from that point.

How quickly to do you process the rebates?

Right now, when we receive an online application, I’ll get back to the applicant within two to three days, with either initial approval or disapproval. After that, we’re waiting for their paperwork to be mailed in. Then, it takes between one and two weeks to send a check.

The very fast turnaround may change, because initially the Air Resources Board gave us seed money so we could turn rebates around very quickly. That seed money is all gone. At this point, every time we get a grouping of rebates, we might have to go back to CARB to request funding, and they have their turnaround time. It’s one of the things we’re working on, because it’s important to us, it’s important for the state, and it’s really important for consumers to get that quick turnaround time.

We want to encourage and incentivize this market. A one-month turnaround time would be the max.

You started with $9.1 million in the kitty, of which some money has gone to rebates for Teslas, electric motorcycles, neighborhood electric vehicles, and commercial vehicles. How much is left?

Almost all of it. By the time the Nissan LEAF is launched in December, there will probably be about $8 million left. That’s an estimate and could change.

That means about 1,600 LEAF customers will get rebates.

That could change. There are number of zero-emission commercial vehicle makers that plan to bring a lot of vehicles to California over the next months. That could potentially take up to $2 million.

That could cut down the number of LEAF buyers to 1,200. How will you know if you get the rebate or not?

The day you buy a LEAF, you can go on our website and see if funds are available. You fill out the online application, and you’ll know right away if your $5,000 is reserved for you. As long you meet all the requirements and mail in all the documentation, it’s yours. It’s on a first-come-first-serve basis. Once you fill out the online application, you’re in the queue.

If funds are depleted, you still have your place in the queue. The Air Resources Board and state regulators are also looking into other funding sources because they know there’s not enough money to rebate all the LEAFs, and Volts in the future. If and when additional funding is brought in, you’ll have your spot in the queue. You’ll get the check when the funds are available.

What’s the source of the funds?

It’s vehicle and vessel registration fees, and smog abatement fees. That’s where the $200 million a year comes from.

What are the factors that will determine if the funding continues in future years?

AB118 is funded through 2015—unless a new bill is passed that changes the existing bill, and there are a few bills right now going through the Senate that is looking to take some of that AB118 funding and put to other programs. Right now, it’s funded through 2015, but that could change. That’s an unknown.

How does a vehicle qualify for the rebate?

All certification goes through the Air Resources Board. For light duty vehicles, like the LEAF and the Volt, all of the regulations follow the Zero Emissions Vehicle (ZEV) mandate guidelines. Vehicles have to be certified as EAT-PZEV, Enhanced Advanced Technology Partial Zero Emissions Vehicle.

The 2010 Prius, not the plug-in version just the regular version, is an AT-PZEV. The plug-in version is an EAT-PZEV. That’s the certification required to be eligible for the rebate project. The LEAF is a ZEV. The plug-in Prius is already certified as an EAT-PZEV.

Why does the Chevy Volt NOT qualify this year?

Regulation requires a 10-year, 150,000-mile warranty on the emissions system and the battery, and that’s not something the Volt is coming with. The Volt has an 8-year, 100,000-mile warranty. The other issue is the emissions system, and whether the Volt's emission system meets the CARB certification on the duty cycle. It’s easy to point to the battery and say done, but there are other issues.

The take home message is that it’s a complex story, and Chevy bringing the car to market very quickly meant that achieving EAT certification would have cost them more money than it’s worth. They would have had to devote engineering staff, and all kinds of resources, in order to get the vehicle certified with CARB for the rebate program. The economic calculation wasn’t worth it [to them]. However, they are doing it for the version of the car being launched in summer 2012, for the 2013 model-year Volt.

AB118 is funded through 2015, but we will reach a time when there’s less government support of these vehicles…

That’s the goal. Eventually remove all the government subsidies, and the technologies can stand alone in the marketplace.

Based on your master’s research and your work at the Center, do you think these electric-drive vehicles can stand alone by 2015 or soon after?

I’m optimistic. It has a lot to do with factors that people can’t predict right now. Battery prices, alternative business models like secondary use of batteries, and gas prices are huge.

Comments

· Danny (not verified) · 4 years ago

Any word on income limitations for the $5k credit? I know the $7500 federal credit is good for taxpayers in all income brackets, but what about the California rebate?

· · 4 years ago

Danny - The California program is a rebate--NOT a tax credit. In other words, you buy or lease a pure electric car, and you get a $5,000 check. It has nothing to do with your tax payment or bracket. As described in this article, the plug-in hybrid rebate is $3,000. But the vehicle needs to be certified by CARB.

· shaun (not verified) · 4 years ago

>>Regulation requires a 10-year, 150,000-mile warranty on the emissions system and the battery

But the leaf's is only 8-year, 100k. so how does it qualify?

· Scott (not verified) · 4 years ago

Nissan Leaf is advertising that they are matching the Chevrolet Volt warranty (i.e. 100,000 miles, 8 years). So, how is it that the Leaf qualifies and the Volt does not?

· Turbo3 (not verified) · 4 years ago

Scott,
Leaf is all electric with no emissions from a gas engine. The Volt has a gas engine and must meet strict CA emission standards. The Volt battery is considered part of the emission system just like the Prius so must have the 10-year, 150,000-mile warranty on the emissions system.

If you don't generate any emissions you get a free pass on the battery. Leaf could have no warranty on the battery and it would still qualify for the $5K rebate

· Leafinterest (not verified) · 4 years ago

Because the CVRP web site states that a buyer has 14 days to get their completed purchase or lease paperwork to CVRP after the purchase, some future Leaf buyers online say that they are planning to apply 12 or 13 days before their purchase date to lock in the rebate, then get their paperwork in rapidly after the purchase to qualify. Will this strategy work, or is the system set up to deny the rebate if the purchase date shown on the purchase documents doesn't match the date the applicant applied online for the rebate funds?

Secondly, do the people on a waiting list after the 2010-2011 funds are used up, say in April or May 2011, get first on the list for any additional funds earmarked for 2011-2012, or are they in some limbo where they are just unlucky and they lose out to people getting their cars after July 1 of 2011?

Thanks.

· · 4 years ago

Leafintrest- Exactly how are people going to get the VIN number of the car before they buy it? I guess its possible the dealer might have it to give it to you. Has someone checked if this is possible? The forms are filled out online so the purchase date being in the future is also a big problem.

· Leafinterest (not verified) · 4 years ago

Apparently, Nissan is going to set up a tracking system so that you can predict when you car will be available. That may include the VIN number.

· · 4 years ago

I doubt it will be by VIN number. More likely just your order number.

I don't really see the problem since submitting the online form the day your purchase (take your smartphone to the dealer) locks in your place in line for the rebate.

· · 4 years ago

@Leafinterest: What I have read (offhand I can't remember where) is that the CA rebate funds are available on a first-come first-served basis. Once the funds for 2011 run out, then buyers will be on the waiting list for the 2012 funds. So, provided the program remains in place, we early adopters should eventually get our rebates if we are willing to wait long enough.

· · 4 years ago

Abasile - You are right: first come, first serve. If you don't make the cutoff for 2011 funds, your place is saved in the queue when future funds become available. It's spelled out above, in the article on this very page:

That could cut down the number of LEAF buyers to 1,200. How will you know if you get the rebate or not?

The day you buy a LEAF, you can go on our website and see if funds are available. You fill out the online application, and you’ll know right away if your $5,000 is reserved for you. As long you meet all the requirements and mail in all the documentation, it’s yours. It’s on a first-come-first-serve basis. Once you fill out the online application, you’re in the queue.

If funds are depleted, you still have your place in the queue. The Air Resources Board and state regulators are also looking into other funding sources because they know there’s not enough money to rebate all the LEAFs, and Volts in the future. If and when additional funding is brought in, you’ll have your spot in the queue. You’ll get the check when the funds are available.

· Leafinterest (not verified) · 4 years ago

I apparently was too wordy, a problem I have.

My question is, does the system allow someone to go online and reserve funds before the day when they actually buy the car, then get their paperwork sent in by the required 14 days? This would allow people to "jump the line" and get the funds before others who wait until the day they order the car to reserve the funds online.

· Denise (not verified) · 2 years ago

I'm considering a 2012 plug in Prius. Is there a California and a federal tax incentive?

· · 2 years ago

Yes, they two are separate. Feds will give $2,500 credit for Prius Plug-in. Calif was $3,000, but I believe it's been lowered.

· Steve (not verified) · 2 years ago

What about leasing a Mercedes Benz F-cell? Will leasing a car qualify or need to buy it? I did just get an F-Cell, but sadly they only offer a 2 year lease. It sure would be nice to cover closing costs and some of the monthly payments if it would qualify. Anyone know?

New to EVs? Start here

  1. Electric Cars Pros and Cons
    EVs are a great solution for most people. But not everybody.
  2. Seven Things To Know About Buying a Plug-In Car
    A few simple tips before you visit the dealership.
  3. Federal and Local Incentives for Plug-in Hybrids and Electric Cars
    Take advantage of credits and rebates to reduce EV costs.
  4. Guide to Buying First Home EV Charger
    You'll want a home charger. Here's how to buy the right one.
  5. The Ultimate Guide to Electric Car Charging Networks
    If you plan to charge in public, you'll want to sign up for charging network membership (or two).
  6. Comprehensive Electric Vehicle Charging Guide for Businesses
    How do you ensure that electric car owners will be happy with every visit to your charging spot?
  7. How to Use the PlugShare EV Charging Station Tool
    Locate EV charging stations and optimize their use with a powerful mobile app.
  8. Guide to Quick Charging of Electric Cars
    Add 50 to 60 miles of range in about 20 minutes. Here's how.
  9. Calculating the Real Price of EV Public Charging
    Compare the cost of charging on the road to what you pay at home.
  10. Eight Rules of Electric Vehicle Charging Etiquette
    Thou shalt charge only when necessary. And other rules to live by.