California pivots state EV incentives to lower-income drivers

California announced this week that it will recast a major EV incentive program to focus on middle- and low-income drivers.

In late 2023, the California Air Resources Board (CARB)—which oversees the state’s EV incentives and emissions rules—will expand the existing Clean Cars 4 All program statewide as a replacement for the Clean Vehicle Rebate Project (CVRP), according to an agency press release.

Unlike the CVRP, the Clean Cars 4 All program considers applicants’ income. In its expanded statewide form, the program will offer up to $12,000 to California residents who scrap and replace older, higher-polluting vehicles with cleaner alternatives, or up to $7,500 for qualifying residents who aren’t replacing a vehicle, as well as “affordable financing options,” the release said.

The CVRP will continue accepting applications while funding remains available. The Clean Cars 4 All program will also continue in its current form until the CVRP expires, offering up to $9,500 toward a new vehicle or $7,500 toward “transit or other shared mobility options” to residents in California’s five clean-air districts.

Since its launch in 2010, the CVRP has issued half a million rebates totaling $1.2 billion, at an average of about $2,500 per rebate, according to CARB. It was always intended to be a limited-duration program, though, and in recent years CARB has tried to limit the number of rebates going to the highest-income drivers with income and MSRP caps.

The CVRP is separate from the California Clean Fuel Reward (CCFR) incentive program, which has been temporarily cut. While the CVRP requires a separate application after purchasing or leasing a vehicle, the CCFR is a point-of-sale rebate that was available immediately. It also doesn’t have income or MSRP caps.

One in four new vehicles in California is now an EV or plug-in hybrid, but that means the state still has a long way to go meet a goal of making all new vehicles have charge ports by 2035. That will partly depend on expanded charging infrastructure, which California aims to address with a $2.9 billion program that will more than double the number of EV chargers in the state.

But a continued reassessment of EV incentives may also be an important part of the emissions-reduction puzzle. In addition to focusing on lower-income drivers, California has also considered recasting its EV policy toward so-called “gasoline superusers,” who burn an outsize amount of fuel.