California EV Incentives & Rebates: A Breakdown

In California, several incentives are available to promote the purchase and use of electric vehicles (EVs). These incentives range from financial rewards to operational benefits.

Here are the current incentives available in California that you should be aware of:

1. Clean Vehicle Rebate Project
2. Federal Tax Incentive
3. Property Tax Exemption
4. Utility Bill Discounts
5. State Tax Deduction
6. Charging Station Incentives

California’s State rebates for EVs are a tricky subject to research. The amount of information is overwhelming and can be confusing.

But keep reading to learn everything you need to know clearly and concisely. Let’s get into it!

Overview Of California’s EV Incentives

In this section, you gain a better understanding of the types of incentives that California offers for EVs. 

Clean Vehicle Rebate Project

The CVRP encourages the use of clean vehicles in California by providing rebates ranging from $1,000 to $7,500 to those who buy or lease new, eligible vehicles that produce zero emissions. These vehicles include electric, plug-in hybrid electric, and fuel cell vehicles.

📖 Source: Clean Vehicle Rebate Project

The goal of this rebate program is to encourage people to choose clean vehicles and reduce air pollution. To qualify for a rebate, the car must meet certain standards and be registered in California. 

The rebate amount depends on factors such as the type of car and the applicant’s income. To apply, submit a form to the California Air Resources Board with proof of purchase and other necessary documents. 

The program is funded on a first-come, first-served basis and helps increase the number of clean vehicles on California roads while improving air quality.

Federal Tax Incentive

The US government is offering a tax credit to make EVs more affordable and encourage more people to drive them. The amount of credit varies depending on the type of electric car you get, but it can be as high as $7,500. 

To get the Federal Tax Credit, you must buy a fully electric car that meets certain emissions standards. You claim the credit when you do your federal taxes, but there are income limits, and the credit will eventually phase out, so keep that in mind. 

Just be aware that the specifics of the credit can change, so it’s a good idea to check for the latest information.

Property Tax Exemption

Property tax exemption is one of the hardest incentives to understand, so here is a breakdown that’s easy to understand.

• California has a property tax exemption for electric vehicles (EVs)
• The property tax does not refer to your home
• The goal is to encourage people to use EVs and make them more affordable
• The taxable value of an EV is limited to $1,000
• This means you only pay property taxes based on $1,000, no matter how much you paid for the car
• The exemption applies to all EVs, including battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs)
• The vehicle must be powered mainly by electricity that can be charged from an external source
• The exemption lasts for 7 years and is available to the original owner or the person who traded in the vehicle

💡 Keep in mind: this exemption is separate from other federal and state incentives and credits available for EVs.

Utility Bill Discounts 

While this is not exactly a tax incentive, it is still an incentive for owning an EV. Many utilities in California offer discounts on monthly bills for EV owners, making it more affordable to own an electric vehicle.

For example, Time-of-Use (TOU) rate plans offer lower electricity rates during off-peak hours when electricity demand is lower. This can benefit EV owners because they can charge their vehicles overnight when electricity is cheaper.

It’s worth noting that these programs and discounts are subject to change, so it’s always a good idea to check with your utility provider for the most up-to-date information.

There are nearly 50 different utility incentives available in California. Check out the resource below for a breakdown of each:

📖 Resource: California Utility Incentives

State Tax Deduction

California also offers a tax deduction of up to $2,500 for the purchase of a new EV. This can be claimed on the state tax return.

The amount of the credit also varies based on the battery size of the EV, with larger battery EVs eligible for larger credits. 

The credit is applied against the purchaser’s state tax liability and may be carried over to subsequent tax years if it exceeds the taxpayer’s liability in the current year. 

It’s important to note that the tax credit is subject to change and may be subject to phaseout or other limitations based on the availability of funds and other factors. 

Additionally, this credit is separate from any federal tax credits that may also be available for EVs.

California EV Charging Station Incentives

California offers various incentives for installing electric vehicle (EV) charging stations to encourage the adoption of EVs and build up the charging infrastructure in the state. Here are some of them:

Certified Electricians For EV Charging Station Installations In California

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There a several other rebates and incentives available at the federal level for home charging stations. Find out more on this full list of utility providers using the resources below:

How to Take Advantage of California’s EV Incentives

So, how do you actually start to take advantage of these incentives? Also, if you’re going to buy an EV, understanding what you need to do beforehand is highly beneficial. 

Use these steps to take advantage of California’s electric vehicle incentives:

1️⃣ Choose a new eligible EV: You’ll need to buy or lease a new battery electric, plug-in hybrid, or fuel cell vehicle in California.

2️⃣ Check your eligibility: You must meet certain income and vehicle requirements to qualify for the California Clean Vehicle Rebate Project (CVRP).

3️⃣ Apply online: Head to the Clean Vehicle Rebate Project website and apply for the rebate.

4️⃣ Provide details: You’ll need to give information about the vehicle, like its make, model, VIN, and purchase or lease date. Plus, show proof of California residency and income.

5️⃣ Submit documents: Within 180 days of buying or leasing the vehicle, you must submit proof of purchase, registration, and driver’s license.

6️⃣ Wait for approval: If your application is accepted, you’ll get your rebate in 4-6 weeks.

Enjoy your rebate, which will vary based on the vehicle you bought and your income.

One of the best things that you can do is ask the person who does your taxes. Any reputable accountant or tax professional should know and be up absolutely to date with the latest information regarding any kind of rebate available in their state.

The Benefits Of California’s EV Incentives

It is no secret that EVs are not the cheapest cars on the market, but incentive programs like the ones that California offer make it cheaper for most people, at least in the long run.

If we look at the broader benefits, California is one of the pioneering states regarding clean energy, at least regarding our roads. Not only are EVs better for the environment, but they reduce noise pollution and much more.

FAQs

How Many EV Rebates Are There In California?

The number of rebates available for EV ownership in California varies depending on several factors, so it is nearly impossible to provide an exact number. That said, there are a few incentives and rebates.

Does Tesla Qualify For A California Rebate?

Yes, Tesla vehicles qualify for a rebate in California, specifically the Model Y and Tesla Model 3. However, to apply now, you must prove that the vehicle was purchased on the 15th of March or before that. To find out more about qualifying for incentives with a Tesla, follow this link.

Key Takeaways

Let’s break down the key points from this article:

1️⃣ California’s EV assistance program significantly reduces the cost of entry, making it more accessible to a larger group of people (low- to moderate-income at 400% of the Federal Poverty Level).

2️⃣ You can save money on federal and state taxes, property taxes, and other expenses thanks to the available schemes.

3️⃣ Utility companies have several attractive offers on home chargers eligible for a rebate.

4️⃣ By providing incentives that make electric vehicles more affordable, California is not only promoting clean transportation but also contributing to a cleaner environment.