Is California's New $5,000 Electric Car Rebate a Good Idea?


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Normally, we'd be 100% behind incentives designed to spur the development of cleaner technologies, and to help consumers make cleaner, more conscious buying decisions. Which is why, on the face of it, California's $5,000 rebate for the purchase of a number of electric vehicles, seems like a good idea. But the structure, and the rollout of the program leaves something to be desired. The rebate is available over a wide span of EV purchases. A consumer can receive $5K rebate for buying a $100K Tesla Roadster, or a $25K Nissan Leaf.

As Andrew Price notes at Good,

A $5,000 rebate won't make the difference for anyone seriously consider a $100,000 Tesla Roadster and it's probably a larger rebate than you need to get people to buy the $25,000 Nissan Leaf. The program won't do any harm, of course, but it doesn't seem like the best use of the money.
I'd tend to agree with him--the rebate for a Tesla seems to be pretty wasteful, as it's not going to make the car more attractive to anyone. The Leaf's rebate, however, strikes me as pretty amazing--there are plenty of people who's buying decision will be impacted by $5K off a $25K sticker price. Then again, the fear is that the cash stock for rebate gets drained before the Chevy Volt even rolls out, which, priced around $32K after the federal rebate, could use the additional rebate most of all.

However, legislation is difficult to 'time' (Gas2, as I do, wishes CA would've waited a couple months) and if the sole achievement of the rebate ends up being to put a whole bunch of Leafs on the road, I say so be it (it won't, however--one of the lesser discussed aspects of the new rebate is that it grants $20K off Smith Electric and EVI medium-duty delivery vehicles. Such vehicles, which are often used by businesses to run predictable routes, are among the best suited for electrification). Such laws are almost never as efficient or as streamlined as we'd like them to be, and the benefits side on the positive here.

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