Exciting news on the electric car front: California has launched the Clean Fuels Reward electric vehicle (EV) incentive program. This new program will instantly reduce the price of a new qualifying battery-electric or plug-in hybrid vehicle by $1,500. When combined with other federal and state incentives, Californians can qualify for up to $13,500 in EV incentives.
Coalition for Clean Air (CCA), along with other environmental advocates, electric utilities, and the automotive industry urged the California Air Resources Board to create the Clean Fuels Reward program. CCA also participated in its development and supported policy changes which made the Clean Fuels Reward program possible. CCA has been instrumental in advocating for many of California’s clean transportation policies. These policy victories include the first smog check program in the early 1980s to Governor Newsom’s recent executive order committing to phasing out new internal combustion-powered vehicles.
How does the Clean Fuels Reward program work?
The Clean Fuels Reward program is funded through electric utilities participating in the Low Carbon Fuel Standard (LCFS.) The LCFS reduces the carbon intensity of transportation fuels and incentivizes cleaner replacements like electricity and hydrogen. Electric utilities earn credits for the electricity used to power EVs. Utilities then sell these credits to industries that create more carbon-intensive products. The revenue from selling these credits, in turn, funds programs like the Clean Fuels Rewards program.
Clean Fuels Reward is also different than other EV incentive programs. Unlike the other existing federal and state incentives, the Clean Fuels Reward program provides “cash-on-the-hood” immediately. As such, participants do not need to submit tax records or wait for processing, which can take months. Clean Fuels Reward can be combined with other federal and state incentives, and may be “stackable” with electric utility incentives (be sure to check with your local utility beforehand, as some have indicated they will not stack incentives.)
How to participate?
To participate in the Clean Fuels Reward program, you will need to purchase or lease a new car from a participating retailer. Participation in the Clean Fuels Reward program is open to all Californians who will register their new vehicle in California. It’s important to remember, however, that only certain vehicles are eligible for the program. Most plug-in hybrids and motorcycles will not get the full $1,500 reward as reward amounts are based on battery capacity. A short, four-page document of all terms and conditions can be found here.
There are, however, a couple of important caveats. First, cars purchased before the program coming online (November 17, 2020) are not eligible for a Clean Fuels Reward. Secondly, used cars are also ineligible. Southern California Edison, however, plans to launch a similar program for the secondhand EV market in 2021.
Incentives are important to California’s EV and climate commitments
EV incentive programs are a key part of California’s strategy to deploy zero-emissions vehicles and reduce greenhouse gas emissions. As of November 2020, almost 764,000 EVs are on California’s roads, accounting for 45% of the nation’s EV fleet. Much more work remains, however, if California is to meet its EV deployment commitments. These commitments include deploying 1 million EVs by 2023, 1.5 million by 2025, and 5 million by 2030.
Transportation is the leading contributor to climate-damaging greenhouse gases as well as health-harming smog. More than half of all greenhouse gases produced in California are from transportation, as are approximately 80% of smog-forming pollutants. California has committed to electrifying transportation not only because both electricity and hydrogen fuel are already cleaner to produce and use than petroleum-based fuels, but they also are constantly becoming cleaner.
In addition to the Clean Fuels Reward program, there are several other EV incentive programs:
- Federal EV Tax Credit: A federal tax credit worth up to $7,500 for the purchase of a qualifying battery-electric and plug-in hybrid vehicles.
- Clean Vehicle Rebate Project: A rebate worth up to $1,000-$4,500 for purchasing a qualifying plug-in hybrid, battery-electric or hydrogen fuel cell car. Qualifying electric motorcycles may receive a $750 rebate. Low-to-moderate income earners may be eligible for an additional $2,500 rebate amount.
- Clean Cars 4 All: A rebate to help lower income consumers scrap their older, dirty vehicles and replace them with cleaner models. This program is currently available to constituents of the following air districts:
- South Coast Air Quality Management District
- San Joaquin Air Pollution Control District
- Bay Area Air Quality Management District
- Sacramento Metropolitan Air Quality Management District.
- Clean Vehicle Assistance Program: A program to help income-qualified Californians finance the purchase or lease new and used EVs and plug-in hybrids.
- In addition to the above programs, your local air district or electric utility may also offer incentives for vehicles or charging equipment. Automotive manufacturers and dealers also have their own incentives, such as providing three years (worth $15,000) of hydrogen fuel.
California must ensure all Californians have access to and benefit from clean transportation. The Clean Fuels Reward program, along with other EV incentive programs, will help make that a reality.