The state of California, which has done more than most to incentivise the purchase and use of electric vehicles in response to its pollution and smog issues, has said that it will begin to row back on subsidies for battery-powered vehicles from this year. The state is planning to get 1.5 million electric vehicles onto its roads by 2025. Currently there are around 100,000 electric cars running on Californian roads, and all of them received a state-sponsored kickback of $2,500 on top of a federal tax credit for Electric Vehicle (EV) purchase.
However, the state legislature has approved a bill that will abolish the rebate (and the $1,500 rebate for plug-in hybrid vehicles) for well-off car buyers. It is understood that the explosion in sales of the Tesla Model S, which retails for $72,240 before the rebates, has inspired the measure. Much in the same way that the strong sales of low-tax BMW 520d models here was said to have inspired changes in the motor tax rates, so California law makers were apparently not keen at well-heeled car buyers being given a state handout for their purchases.
Tesla, for itself, seems sanguine about the move, with vice president for business development Diarmuid O'Connell telling the Los Angeles Times that "I think there is a fair argument that wealthy people have less of a need for rebates than others."
