Californians, wanting to buy an electric vehicle; hold your breath as there is going to be a hearing this week regarding a $4,500 subsidy on every electric vehicle sold in the state. The move will see an increase of $2,000 in the subsidy. Up from the current $2,500.
The federal government offers a $7,500 tax credit on electric cars for now. The credit is said to scale down as soon as the companies have sold a total of 200,000 vehicles each. Tesla achieved the feat in July, and General Motors is not so far behind.
There are still some like chairs of the state’s Air Resources Board Mary Nichols who have not abandoned hope that Congress will lift the cap so that more electric vehicle buyers can reap the tax credit. But the good news is that in case that does not happen she said, “we would have to look at another way to make up for that.”
This news comes at a time when the President is saying that only the federal government can umpire the electric vehicle sales.
Research director for clean vehicles at the Union of Concerned Scientists, Don Air, said “At the end of the day, California officials looked at the data, came to a different conclusion than Trump, and are proceeding with the authority they already have under the Clean Air Act,”
And before you question how the states can offer subsidies on electric cars sales, you should know that as companies buy more credits to comply with the state’s Low Carbon Fuel Standard, the state gets more revenue. California is expected to provide funding for the subsidy program from the revenue generated by this scheme. The subsidy will be provided at the time of the sale than via mail later.
Though the current $2,500 subsidy comes for a different source now. The credits purchase by companies to comply with the state’s cap-and-trade program for reducing carbon-dioxide emissions.