California has a goal of putting 1 million zero-emission vehicles on its roads by 2023, which was set last year, but at the rate EVs are selling currently, this seems like a pretty tough and ambitious target to meet. That’s why the state has been pushing new laws and regulations that would make electric cars a more convenient alternative to conventional cars. California offers some of the most generous incentives for green vehicles in the country, which apply to hybrids, hydrogen, and all-electric cars. The state’s incentives include HOV-lane exemptions, rebate programs, sales tax exclusion for manufacturers, and insurance discounts.
The latest initiative that’s aimed at encouraging consumers to buy electric vehicles involves a proposal for reducing the sales tax on green vehicles by more than half. The Los Angeles Times reports that Democratic Assemblyman Phil Ting has proposed a bill that would cut the sales tax on plug-in hybrids, all-electric, hydrogen fuel-cell vehicles and compressed natural gas vehicles, by over 50%, from the current 7.5% to 3.06%.
The bill would have substantial financial implications for the state, as it is estimated to cost California about $92 million in lost tax revenues per year, based on 2014 EV sales, but the bill’s author, Phil Ting says that it could be made up through the state’s cap-and-trade program. The Los Angeles Times says that the cap-and-trade fund has over $960 million, citing data from the California Air Resources Board.
The report states that a few automakers have already greeted the proposed bill. Representatives of Nissan, which builds the Leaf EV – the world’s best-selling all-electric vehicle, as well as Chevrolet, the manufacturer of the Chevy Volt plug-in hybrid told the LA Times that their companies support the bill.
Last year, a total of 60,000 plug-in cars were sold in California, at an average price of around $35,000. At the moment, the state supports the purchase of green vehicles with a wide array of incentives. California awards rebates of up to $2,500 to those who purchase an all-electric car, and up to $1,500 for hybrids, while hydrogen fuel cell vehicles are eligible for rebates of up to $5,000. In addition to this, owners of alternative fuel vehicles can apply for decals for HOV lanes, which are usually designated for vehicles with minimum 2 or 3 occupants.
However, the Los Angeles Times states that consumers won’t be able to feel the sales tax cuts soon, and buy green vehicles at significantly lower prices, given that the bill has to be voted on by a full Assembly, and approved by a committee, which could take several months.
In any case, if it is passed, the bill would be an important tool for helping California accelerate EV adoption and increase sales of green vehicles, as part of the efforts for putting more zero-emission cars on the roads and reducing petroleum use in motor vehicles by 50% within the next 15 years, a goal set by Governor Jerry Brown recently.