At the 2018 New York International Auto Show, there was a variant of an electrified vehicle on every manufacturer’s stage. Some have been around for years, some we got to see for the first time.
Thanks to Toyota (the company with the longest running hybrid), Tesla (the only all-electric car company in the United States), and California electrified cars are catching on. There are more hybrids, plug-in hybrids (PHEV), and pure electric vehicles (EV), also known as battery electric vehicles (BEV) on the market every year.
What are hybrids, plug-ins, and electric vehicles?
The simple answer is Hybrids use an advanced battery to create better miles per gallon with an internal combustion engine. Plug-in electric hybrids (PHEV or PEV) can use electricity or gasoline to energize a car. EV or BEVs only use electricity. Hybrids are so ubiquitous that they don’t get the same benefits, if any, as a PHEV or EV.
What are the top ten reasons to buy a Plug-in hybrid or Electric Vehicle?
All of the information on this page is informational only, and some will have expiration dates. Please consult your tax advisor for the final word.
1. Federal Tax Credit – You can get as much as $7,500 on an electrified vehicle. Each model is allowed a certain number of cars to qualify for the FTC, so make sure the Federal Tax Credit is still available before you purchase.
2. State Tax Credit – The same goes for the State Tax Credit; each model is allowed a certain number of cars to qualify for the STC so make sure the State Tax Credit is still available before purchase. You can also get certain city credits or low-income discounts. There are certain jurisdictions that have a “Replace Your Ride” program that will give you discounts on the car to retire and replace an old vehicle with a low-emission vehicle, depending on income level and vehicle model.
California is known as the State that leads in regulations, but they are also the State that leads in credits and discounts. Below is a list of known tax credits and discounts in California, which will give you an idea of some of the benefits that might be available in other States. The National Conference of State legislatures is where I got the information. That website lists all credits and discounts for all States.
3. Access to HOV Lanes – the all coveted HOV lane access is one of the reasons people say they buy the PHEV or EV. You’ve heard people complain that they see a Toyota Prius speeding in the HOV lane? That is because they can and the person complaining is probably sitting in their gas-consuming pickup truck all by themselves.
4. Discount with E-Z Pass – New York and other States that have E-Z Pass allow discounts. Check it out!
5. Emissions testing exemptions – If you have no emissions, why do you need to spend money to have nothing tested?
6. Preferred parking spaces – because the parking spaces closest to the shopping center are also the spaces that are closest to the electricity you will park closer to the center than with a gasoline car.
7. Rebates from electric utilities – not just for having a PHEV or EV, but if you put solar panels on your house. In most States, the electric companies will buy the electricity from you, for pennies on the dollar, but that is better than paying for electricity and gasoline. Check to see if your local government has Property-Assessed Clean Energy (PACE) financing to install EV supply equipment (EVSE).
8. Air Quality – No matter how clean an internal combustion engine is, the emissions that come out of a gasoline or diesel car are more harmful than the non-emissions that come out of a zero emissions vehicle (ZEV).
9 Performance benefits – Electric motors are quiet, they have the best low-end torque available and require less maintenance than internal combustion engines (ICEs).
10. Reduced energy dependence – Electricity is a domestic energy source and will reduce the dependence on foreign oil, increasing the amount of money kept in the United States.
CA flagAdvanced Transportation Tax Exclusion: California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA) provides a sales and use tax exclusion for qualified manufacturers of advanced transportation products, components, or systems that reduce pollution and energy use and promote economic development. Incentives are not available after December 31, 2020.
AFV & Fueling Infrastructure Grants: The Motor Vehicle Registration Fee Program provides funding for projects that reduce air pollution from on- and off-road vehicles. Eligible projects include purchasing AFVs and developing alternative fueling infrastructure.
AFV Parking: The California Department of General Services (DGS) and California Department of Transportation (DOT) must provide 50 or more parking spaces and park-and-ride lots owned and operated by DOT to incentivize the use of alternative fuel vehicles.
AFV Rebate Program: The San Joaquin Valley Air Pollution Control District administers the Drive Clean! Rebate Program, which provides rebates of up to $3,000 for the purchase or lease of eligible new vehicles, including qualified natural gas and plug-in electric vehicles.
Alternative Fuel & Vehicle Incentives: Through the Alternative and Renewable Fuel Vehicle Technology Program, the California Energy Commission provide financial incentives for businesses, vehicle and technology manufacturers, workforce training partners, fleet owners, consumers and academic institutions with the goal of developing and deploying alternative and renewable fuels and advanced transportation technologies. The program will be available until Jan. 1, 2024.
Electric Vehicle Supply Equipment (EVSE ) & Charging Incentives—Sacramento: Sacramento Municipal Utility District (SMUD) offers residential customers a $599 rebate or a free Level 2 (240-volt) plug-in electric vehicle charger. Rebates or chargers are available to SMUD residential customers with the purchase or lease of a new PEV.
EVSE & Charging Incentives—Sonoma: Qualified Sonoma Clean Power (SCP) customers are eligible to receive a free JuiceNet-enabled EVSE from eMotorWerks, which allows the EVSE to be connected to Wi-Fi and communicate with the SCP CleanCharge software. This software helps customers avoid using as much power when California’s electric grid is particularly expensive or harmful to the environment. Customers with an existing standard, non-connected EVSE, are eligible to receive a free JuicePlug (smart grid adapter) to convert to a JuiceNet-enabled EVSE. Customers are responsible for shipping and installation costs. Eligible customers may also receive a $250 rebate in JuicePoints to pay for charging.
EVSE Incentives—San Joaquin Valley: The San Joaquin Valley Air Pollution Control District (SJVAPCD) administers the Charge Up! A program, which provides funding for public agencies and businesses for the purchase and installation of new, publicly accessible EVSE. A single port Level 2 station is eligible for up to $5,000 per unit, and a dual port Level 2 station may receive up to $6,000 per unit. There is an annual funding cap of $50,000 per applicant.
EVSE Loan & Rebate Program: The Electric Vehicle Charging Station Financing Program, part of the California Capital Access Program (CalCAP), provides loans for the design, development, purchase, and installation of EVSE at small business locations in California. The program may provide up to 100 percent coverage to lenders on certain loan defaults. Lenders must apply to the California Pollution Control Financing Authority (CPCFA) to participate and enroll each qualified EVSE loan through CalCAP. Upon approval, CPCFA will pay a premium into the lender’s loan loss reserve account for up to 20 percent of the loan amount and contribute an additional 10 percent for installations in multi-unit dwellings and disadvantaged communities. Small businesses are eligible for a rebate of 50 percent of the loan loss reserve amount after the small business repays the loan in full or meets monthly payment deadlines over a 48-month period. Eligible borrowers must be small businesses with 1,000 or fewer employees and must maintain legal control of the EVSE for the entire loan period. The maximum loan amount is $500,000 per qualified small business and can be insured for up to four years. The California Energy Commission funds the Program.
EVSE Rebate—LA: The Los Angeles Department of Water and Power (LADWP) Charge Up L.A.! Program provides rebates to residential and commercial customers who install Level 2 (240 Volt) chargers. Commercial customers who purchase and install EVSE for employee and public use can receive up to $4,000 for each charger. Residential customers who install wall-mounted chargers can receive up to $500. EVSE must be installed within the LADWP service area; rebates do not cover the cost of installation. Rebates are available on a first-come, first-served basis through June 30, 2018, or until funds are exhausted, whichever occurs first.
HOV Lane Exemption: Qualified alternative fuel vehicles—including hydrogen, hybrid, and electric vehicles—may use designated HOV lanes regardless of the number of occupants in the vehicle. Qualified vehicles are also exempt from toll fees in High Occupancy Toll (HOT) lanes.
Insurance Discount: Farmer’s Insurance offers a discount of up to 10 percent on certain insurance coverage for HEV and AFV owners.
PEV Charging Rate Reductions: The Sacramento Municipal Utility District (SMUD), Southern California Edison (SCE), Pacific Gas & Electric (PG&E), Los Angeles Department of Water and Power (LADWP), and San Diego Gas & Electric (SDG&E) provide discounted rate plans to residential customers for electricity used to charge qualified electric vehicles.
PEV Credit: San Diego Gas & Electric (SDG&E) offers an annual credit of $50 to customers who own or lease a PEV. The credit is available to qualified customers through 2020.
PEV Rebate: Pacific Gas and Electric (PG&E) provides rebates of $500 to residential customers who purchase or lease an eligible PEV. Residential account holders may apply on behalf of a PEV owner in their household or their tenant in a multifamily household with the vehicle owner’s permission.
Plug-In Hybrid & Zero Emission Light-Duty Vehicle Rebates: The Clean Vehicle Rebate Project (CVRP) offers rebates for the purchase or lease of qualified vehicles. Qualified vehicles are light-duty zero emission vehicles and plug-in hybrid electric vehicles (PHEVs) the California Air Resources Board (ARB) has approved or certified. Rebates are available on a first-come, first-served basis to individuals, business owners and government entities in California that purchase or lease new eligible vehicles. Manufacturers must apply to ARB to have their vehicles included in the CVRP. For vehicles purchased on or after March 29, 2016, eligibility for the rebate for individuals is based on gross annual income, as stated on the individual’s federal tax return. Individuals with a gross annual income above certain thresholds are only eligible for rebates for fuel cell electric vehicles (FCEVs ). For individuals with low and moderate household incomes of less than or equal to 300 percent of the federal poverty level, rebates are increased by $1,500, for a total rebate amount of up to $6,500. Beginning Nov. 1, 2016, rebates are increased by $2,000 for qualifying households. Increased rebates are available for ARB-approved FCEVs, PHEVs, and battery electric vehicles. ARB determines annual funding amounts for the CVRP, which is expected to be effective through 2023.
Special Vehicle Registration Fee on HEVs/EVs: S.B. 1 (2017), codified as Cal. Vehicle Code §9650.6, requires all owners of zero-emission vehicle model year 2020 or later to pay an annual fee of $100, effective July 1, 2020.
Voluntary Vehicle Retirement Incentives: The San Joaquin Valley Air Pollution Control District and the South Coast Air Quality Management District administer the Enhanced Fleet Modernization Program (EFMP) Pilot Retire and Replace program, providing incentives to replace a vehicle eligible for retirement with a more fuel-efficient vehicle. Used vehicles must be no more than eight years old, and applicants must live in the San Joaquin Valley or South Coast air basins. Eligible replacement vehicles must meet a minimum fuel economy average by model year or average at least 35 miles per gallon (mpg). Alternative fuel vehicles are also eligible, including plug-in hybrid electric vehicles (PHEV) and zero emission vehicles (ZEVs). Incentives range from $2,500-$4,500.
Federal tax credits are good for the first 200,000 vehicles sold. Every month the credits change, because of the number of that particular car sold, so check before you buy. This is informational only, so check with your tax advisor.