Update: CHEAPR BEV Incentive To Be Reduced In August

Photo: Chevrolet Equinox

Changes to BEV incentive and Rebate+ (income-limited) Incentives

BEV incentive to be reduced for the second time this year, to $1000

Changes to this program are forthcoming on August 15, 2025. These changes involve a lower standard incentive for battery electric vehicles, and a restructuring of the Rebate+ incentives. The standard BEV incentive is responsible for the bulk of the program’s disbursements.

• The standard BEV incentive is reduced to $1000 from $1500. It had been reduced to $1500 from $2250 in January.
• The standard PHEV incentive remains at $750.
• Rebate+ is now separated into two parts.
  • Rebate+ for individuals with incomes of no more than 3 times the federal poverty level or participation in public assistance programs such as SNAP, free school lunches and some others.
  • Community+ rebates for people living in Environmental Justice communities who are not eligible for the income limited rebates.
• The incentive for Rebate+ new BEV is increased to $4000 from $3000.
• The incentive for Rebate + new PHEV remains at $1500.
• The incentive for Community+ new BEV is $2000.
• The incentive for Community+ new PHEV is $1500.

It used to be that people living in EJ communities would also be eligible for Rebate+. The latter is now strictly for lower income individuals.

Legislation was passed this year that enabled the separate Community+ category and removed the restriction that limited the amount of the Rebate+ incentive to twice that of the standard rebate.

Rebate+ for Used EVs

The program offers incentives for used EVs as part of Rebate+. These remain unchanged at $5000 for a BEV and $3000 for a PHEV.

Pre-Qualification Vouchers for Rebate+

For prospective Rebate+ customers, there is a pre-qualification voucher. The introduction of this feature a while back was a definite improvement for the program. It allows someone to confirm their eligibility beforehand. And the voucher can be given to the seller so that the incentive comes right off the invoice price as it does with the standard incentive. (The original design required users of Rebate+ to float the cash and be reimbursed by the state after the fact.)

Fuel Cell

CHEAPR has included incentives for fuel-cell vehicles (FCEV) since its inception. It has yet to award a single one in the 10+ year life of the program and there are only 3 of these registered in the state. Nevertheless, there are adjustments being made for these as well. The standard FCEV incentive is being reduced to $1500 from $7500 (really!). FCEV Rebate+ New increases to $3000 from $2000. FCEV Rebate+ Used goes to $5000 from $7500.

We are not aware of any FCEVs sold in the state, but should the situation arise, we recommend avoiding these vehicles. California is the only state that invested serious money in hydrogen subsidies and infrastructure, which yielded only modest results and they have backed away from it. Hydrogen refueling stations have been closing. Owners of these vehicles are finding themselves with a stranded asset. And, oh yeah, the hydrogen is dirty. It is made from natural gas. Clean hydrogen remains expensive and produced in very small quantities.

Outlook

The program run-rate is lower this year than last as a result of the reduced  BEV incentive and a decline in the number of incentives awarded. It is probably too soon to say that the lower incentive is the cause of the reduced number of incentives.

Many in the EV world expect the period between now and the sunset of the federal incentive on September 30 to be a busy time for EV sales. It is unfortunate that we have a reduced state incentive as the federal incentive was terminated.

The changes over the past few years, gradual as they have been, indicate a shift in focus of the program toward the income-limited and EJ community incentives. We expect this to become more pronounced going forward, but we’ll see.

Subsequent to DEEP announcing these changes, the OBBB passed Congress. One of its many depredations is that it will kick people off government assistance programs. This could potentially shrink the eligibility pool for Rebate+.