Oregon Might Promise Electric Vehicle Rebates Before Funding Is Actually Available

Oct 20, 2017

Starting in January, Oregonians in the market for a new electric or plug-in hybrid vehicle could be offered a significant incentive: a taxpayer-funded rebate of up to $2,500.

“The rebate is essentially cash on the hood,” said Rachel Sakata of the Oregon Department of Environmental Quality. 
 


At least, “cash on the hood” is how the program will eventually work. When the new law takes effect in January, the electric vehicle rebate will be funded by a 0.5 percent tax on the purchase of new cars and trucks. But DEQ estimates it won’t collect enough money from that tax until April at the earliest. 
 


So for the first few months of the program, people counting on the rebate to offset the cost of their new electric car won’t enjoy their cash rebate at the time of sale. Instead, they’ll have to fill out an application form and wait until the state has collected enough from the tax on new vehicle purchases.

“There are a lot of different factors for people in deciding whether or not to purchase electric vehicles,” Sakata said. “It’s sort of up to their own calculus as to what works for them.” 
 


She noted that there is a separate federal tax credit of up to $7,500 for electric vehicle purchases. But since it’s a tax credit, not a point-of-sale rebate, the money isn’t available to immediately offset the cost of the vehicle. 
 


The electric vehicle rebate was included in a massive transportation package approved by Oregon lawmakers in July. The bill earned bipartisan support in Salem, but some Republican lawmakers criticized the rebate, which they said would primarily go toward wealthier people who may be more likely to purchase a new vehicle.

A separate rebate program offers up to $2,500 to people from low and middle-income households who purchase a new or used electric or plug-in hybrid. But to qualify, those car-buyers have to dispose of an operating vehicle that’s more than 20 years old. If they do qualify, the two rebates can be combined for an overall cash incentive of up to $5,000. 
 


Sakata said the details of how the electric vehicle rebate works will be ironed out in a rule-making process that’s expected to kick off later this fall. The rules will ultimately go before the Environmental Quality Commission for approval.