Record Year for Rebates But The Program May Be Charting a Change of Course
The CT EV purchase incentive program awarded 6541 incentives in 2024. The chart at the top shows the monthly trend. Below are the annual numbers. The dip between 2019 and 2021 was when the program lowered the MRSP cap from $50,000 to $42,000 before raising it back to $50,000 again.
Focus On Rebate+
The program has introduced higher rebates on new EVs and rebates for used EVs, both restricted to individuals with incomes at or below 3 times the federal poverty level, or who participate in certain government assistance programs (e.g. SNAP, free school lunches), or for residents of environmental justice communities. The number of Rebate+ awards has been creeping up to where they comprise 9% of all rebates, but few of them are for used EVs. There has been a lot of focus at the policy level, and not only in CT, to drive higher adoption in EJ communities which invariably have poor air quality and high rates of cardiopulmonary and other diseases. The Inflation Reduction Act includes the Justice 40 provision for this purpose. CHEAPR itself moved from a reimbursement model, which is a big ask for these recipients, to a pre-qualification voucher that can be presented at the dealership. (This blog has felt that the list of eligible used vehicles is too restrictive.)
The pie chart below is based on counts of rebates and not associated dollars, which would show a slightly higher proportion going to Rebate+.
Rebate+ Incentive Changes
There is a bill before the legislature, 1496, in the Environment Committee. The changes would allow DEEP to focus on Rebate+ incentives by, for example, giving DEEP greater flexibility than now currently exists with respect to the ratio of the Plus incentives relative to the base incentive. Currently, Plus can be no greater than 200% of the standard rebate. The bill would also draw a distinction and grant a lesser rebate for an EJ community resident who is not in a financially disadvantaged situation. In general, there seems to be an intent to shift the focus of the program more squarely on disadvantaged consumers. This is an excerpt from Commissioner Dykes of DEEP in her testimony: “DEEP would like to refocus the CHEAPR program to assist residents facing the greatest barriers. Lastly, this change aligns with DEEP’s environmental justice goals under Public Act. 20-6, and with changes being made in other jurisdictions to prioritize low to moderate income residents for electric vehicle incentive programs.”
This bill had a public hearing on March 17 and awaits a committee vote.
Primary BEV Incentive To Be Lowered Again
The same reason that caused the incentive to be lowered from $2250 to $1500 as of January of this year, concern about funds depletion due to high utilization, is leading to another cut. As can be seen from the graphs at the top of the post, and from data that was discussed at the recent CHEAPR board meeting, the run-rate is still high. The plan is to reduce the incentive to $1000 as of July. The proposed 1460 law noted above would be needed to maintain (or increase) the current $4500 Rebate+ New rebate level. It would otherwise have to be lowered to $3000.
Fleet Incentive May Be An Endangered Species
The fleet incentives that were part of the legislation from several years ago and not yet implemented are retreating further over the horizon. A plan was developed to pilot of this in a limited number of locales, supported with federal funds. DEEP had obtained conditional approval but no funds have been forthcoming, similar to what has been happening with a lot of programs. (Unrelated, but along the same lines, the Department of Transportation advises that unspent NEVI funds have been frozen.)
Still the Time to Buy
Despite the EV hostility in Washington, the federal incentive is still here for now, and with the CHEAPR incentive about to get reduced, now remains a good time to buy.
One interesting note from a dealer that is on the CHEAPR board: Used EVs are finally hot! After hearing reports for years that dealerships found used EVs to be a tough sell, his remark was, “They don’t sit long.”