- EV sales in California were up 29 percent in 2023, and the state is responsible for nearly half of all EVs sold in the U.S. last year.
- The state is looking to expand ownership to more income levels, in part by a new program subsidizing the purchase of used EVs to people who trade in gas vehicles.
- California is also working to get charging stations into more places, including lower-income areas.
In California, as in the rest of the industry, the growth in EV sales seems to be slowing. But even as the curve shallows out slightly, records are still being shattered. Last year, Californians brought home nearly half a million electric vehicles, a 29 percent increase over 2022 sales. That’s nearly half of all EVs sold in the U.S. in 2023; one-quarter of all cars sold new in California are electric.
The sunshine state’s mandated target of 35 percent zero-emission new-vehicle market share by 2026 still seems ambitious, but doable. Perhaps even more impressive is that the trend towards mass EV ownership comes even as California continues to restrict rebates on electrified vehicles, mostly based on income caps.
The two stackable federal rebates of $3750 each continue to apply in California, assuming the vehicle in question qualifies. To do so, it must have final assembly completed in North America, with battery materials and components sourced and manufactured in countries with a free-trade agreement with the U.S. There’s also a retail cap of $55,000 for cars and $80,000 for SUVs and trucks. You can get the full credit with an F-150 Lightning or Tesla Model 3, or a partial rebate for something like a Rivian R1S under the $80K mark.
To further restrict rebates going to luxury purchases, the federal credit is restricted to income limits between $150,000 and $300,000. Effectively, this federal program has replaced California’s Clean Vehicle Rebate Project, which began in 2010. As of November 8, 2023, the CVRP is no longer available.
But EV adoption in California still leads the way, particularly in San Francisco. For the most part, that’s a function of wealth, as it’s far easier to make the jump to an EV if you can afford their generally higher prices and have the ability to charge at home.
For its next act, the California Air Resources Board (CARB) is thus pivoting to trying to support an EV transition for families with moderate income and below. The success or failure of these programs will likely show what direction continued EV adoption will take in the U.S. at large.
Clean Cars for All Program
With the federal tax rebates now making new EV purchases look more affordable, CARB’s new program looks to support an electrified transition in the used market. Its Clean Cars 4 All program is tied to income, and provides between $5000 and $9500 worth of support for the purchase of a hybrid or EV not more than eight years old, when trading in an older vehicle.
There are all kinds of restrictions on this program, which is currently available in five of California’s air districts (one example is Drive Clean in the San Joaquin). Income is capped at 400 percent of the U.S. Federal Poverty Level (lower in some districts) and is at first being targeted in specific low-income areas.
The overall aim is similar to the old federal Car Allowance Rebate System (CARS), better known as “Cash for Clunkers.” The idea is to defray the greater cost of a hybrid or BEV for low- and moderate-income families, versus a conventional combustion-engine vehicle.
To help navigate through its somewhat byzantine regulations, CARB offers an incentive search page, organized by ZIP code. There is also a similar searchable resource run by Plug-In America.
It’s not just rebates that will continue to drive the electrification of California’s passenger vehicle fleet, it’s the echo of CVRP itself. By supporting the adoption of EVs and hybrids, even initially by wealthier buyers, CVRP created an initial demand for electrification that will now be coming onto the used market.
Anyone who leased an EV using California state credits will be turning in their vehicle in two or three years, and that vehicle will now be part of the used supply. The federal rebates will likely support continuous demand, but supply in the used market will make EVs more affordable. Of course, the next problem is how to keep this electrified fleet charged.
The Charging App
Probably the biggest barrier to EV adoption is whether or not you are able to charge at home. If you can, then great news: it’s like having your own personal fuel station. If not, you’re relying on a charging infrastructure which is nowhere near as robust or widespread as the gasoline stations you’re probably used to.
Support will have to come here from manufacturers looking to sell more EVs, as is the case with the recent partnership between BMW, GM, Honda, Hyundai, Kia, Mercedes, and Stellantis. Further, the widespread adoption of the North American Charging Standard (NACS) connector will finally take some of the guesswork out of charging. NACS isn’t the best option for fast charging, in the same way that VHS wasn’t better than Betamax, but at some point the industry had to pick a single format, and it has done so.
With that in mind, California is releasing some $38 million in funds to support charger installations in lower-income neighborhoods throughout the state. More available and reliable charging options are even more important to low and moderate income EV ownership than they are for early adopters. The latter often has the luxury of time to hunt down a working plug-in. Most people don’t.
In the meantime, as charging infrastructure grows, hybrids make for an easier consumer choice for electrified transportation. And in California, buyers face both carrot and the stick.
Pressured into Electric
The two big bruiser goons looking to strong-arm Californians into more efficient and cleaner-running cars are traffic and fuel prices. Rush hour is basically round-the-clock in Los Angeles these days, and having the access to high-occupancy lanes is a huge boon for EV and hybrid owners.
If you look at Norway, often held up as a Scandinavian Eden for EVs, one of the main pressures that pushed buyers into battery-electric adoption was the ability to avoid tolls and use the bus lanes into cities like Oslo. The high-occupancy lane exception is a great perk in California, and as the streets get even busier, it’s almost a necessity.
As for fuel prices, the West Coast is consistently the most expensive place to buy a gallon of fuel in the U.S., apart from Hawaii. Environmental concerns may be secondary, but when pain at the pump hits you right in the wallet, selecting a high-mpg hybrid or a EV with cheaper charging costs is just financially sensible.
Taking the Lead
California has long been a beacon for various types of automotive trends, whether it’s hot rod culture or Toyota’s CALTY design studio bringing life to the latest 4Runner. When it comes to EV adoption, the state is ahead of the curve.
Federal EV credits are, from a financial standpoint, basically the CVRP writ large for the U.S. as a whole. In California at least, that program did what it set out to do, setting electrification on a path to meet some ambitious adoption goals. It’ll take longer in other states, but the money is there.
Success in building charging infrastructure, and spreading electrification beyond wealthier postal codes will be key to California hitting its 2030 and 2045 goals. Other states will be watching carefully to see what works and what doesn’t. California leads the way.
Brendan McAleer is a freelance writer and photographer based in North Vancouver, B.C., Canada. He grew up splitting his knuckles on British automobiles, came of age in the golden era of Japanese sport-compact performance, and began writing about cars and people in 2008. His particular interest is the intersection between humanity and machinery, whether it is the racing career of Walter Cronkite or Japanese animator Hayao Miyazaki’s half-century obsession with the Citroën 2CV. He has taught both of his young daughters how to shift a manual transmission and is grateful for the excuse they provide to be perpetually buying Hot Wheels.