Now, legislation in Sacramento is designed to juice the market, just as a new generation of long-range electric cars hits showroom floors.
A bill from Assemblyman Phil Ting, D-San Francisco, would revamp and expand California’s existing rebate program for people who buy electrics or plug-in hybrids. The bill, a version of which has already passed the Assembly, would devote $3 billion to clean car incentives. The money would come from the state’s cap-and-trade system for controlling greenhouse gas emissions.
The new rebates would start big — how big has yet to be determined — and then shrink over time, as plug-in cars become more common and affordable. Eventually, the rebates would disappear altogether.
It’s the same approach California used 10 years ago to kick-start sales of rooftop solar arrays. That rebate program helped create the state’s solar industry.
Even in eco-conscious California, sales of battery-powered cars have not accelerated as quickly as state officials wanted, due to relatively low gasoline prices and the limited range of most electric vehicles.
But late last year, General Motors started selling a $37,500 car — the Chevy Bolt — that can go 238 miles on a charge, long enough to handle even brutal Bay Area commutes. Tesla just debuted its $35,000 Model 3, whose base model gets 220 miles per charge. And Nissan is expected next month to introduce the long-awaited redesign of its electric Leaf, offering similar range.
“It’s time to be even more aggressive,” Ting said. “The reason we’re doing this now is there really hasn’t been electric vehicles for the mass market before. Most (electric vehicles) get 80 miles, and even if you live in San Francisco and you’ve got a 30-mile commute, you can get range anxiety pretty quickly.”
California has set ambitious goals for slashing its greenhouse gas emissions and has stuck to those goals even as the federal government under President Trump moves to gut federal climate-change efforts.
State law calls for cutting greenhouse gas emissions 40 percent below 1990 levels by 2030. That can’t happen, however, unless drivers switch to cleaner cars.
Transportation accounts for 37 percent of all the state’s greenhouse gas emissions, more than any other sector of the economy.
“There’s no way to meet our climate goals without dramatically reducing emissions from transportation,” said Don Anair, deputy director of the clean vehicles program at the Union of Concerned Scientists public policy group. “We’re not going to get there by continuing to burn oil in our cars.”
Gov. Jerry Brown wants 1.5 million electric cars on the state’s roads by 2025.
Ting just bought a Bolt, which he can drive from San Francisco to Sacramento and back on a single charge (although he usually tops off the battery at work). “This is a major shift,” he said. “Now you have cars that fit most consumers’ needs.”
The current state rebate system offers $5,000 for hydrogen fuel-cell vehicles, $2,500 for electrics and $1,500 for plug-in hybrids. More than $439 million in rebates have been handed out so far, with about 38 percent of the money going to Bay Area drivers. The popular program often runs out of money during the year, forcing rebate applicants to sit on a waiting list until the Legislature appropriates more cash.
Ting’s bill, AB 1184, would make several significant changes. Rebates would be handed out at the point of sale and would be tied to a dedicated, ongoing funding stream. Dealers would be able to factor the rebates into their advertised prices for cars, something they can’t do now without potentially misleading buyers.
The bill also calls for pegging the size of the rebate to the price difference between an electric car and “the cost of the most frequently sold compact car in the state.” The goal is to eliminate the higher up-front cost of electric cars as a reason for people not to try them, but the idea is only vaguely sketched out in the bill draft available online.
“I have no idea what that language means,” said Gene Erbin, a lobbyist representing the Alliance of Automobile Manufacturers, at a July meeting of the Senate’s Committee on Energy, Utilities and Communications.
The bill’s fate is far from certain, and elements of it remain subject to change.
Many of the key details — such as the size of the rebates and the exact method of calculating them — would need to be hashed out by state regulators, should the legislation pass. Some critics say it favors electric cars over plug-in hybrids and fuel-cell vehicles, issues Ting says he wants to address.
An analysis prepared in June for a Senate committee questioned many of the bill’s details, including its recommendation that the program receive $500 million each year from the proceeds of the cap-and-trade program until the $3 billion total is reached. Cap and trade, the analysis noted, generated $850 million in revenue last year, of which $510 million was already appropriated to other programs.
In addition, the bill faces criticism that it is meant to help Palo Alto’s Tesla, whose first three models — before the Model 3 — generally cost more than $100,000. Tesla buyers currently can take advantage of both the state rebate and a $7,500 federal tax credit. But the federal credit for any automaker’s customers phases out when the number of electric cars sold by that automaker in the U.S. reaches 200,000. Tesla is expected to hit that number within the next year.
Steve Chadima, senior vice president of Advanced Energy Economy, which represents businesses pushing for a low-carbon economy, said the bill had “nothing to do with Tesla.”
“The word ‘Tesla’ never passed anybody’s lips the entire time we were talking about how to construct this bill,” he said.
Even if Ting’s bill passes, electric vehicles still have a long road ahead, including in California.
As of May, California drivers had registered 153,737 pure electric cars — just over half of all electrics nationwide — as well as 143,473 plug-in hybrids, according to the Auto Alliance, an industry group. While the numbers are growing, those cars together represent just over 3 percent of California’s new car market. Many consumers don’t want to deal with a new technology and the routine of figuring out when and where to charge up their cars, particularly when gasoline prices are relatively low.
“You’re asking people to adopt different behavior — it’s not exactly seamless with the way they behaved before,” said Jessica Caldwell, executive director of industry analysis at the Edmunds auto information service. “I used to live in a condo, and I can’t imagine asking the HOA to install a home charging system.”
©2017 the San Francisco Chronicle Distributed by Tribune Content Agency, LLC.