Massachusetts electric vehicle rebates would be revived under climate bill

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Date: August 6, 2019
Author: Sarah Shemkus

A major climate bill that unanimously passed the state House last week would provide another $30 million for rebates.

A Massachusetts electric vehicle rebate program slated to end in September could get a new shot at life. The state House of Representatives last week unanimously passed a wide-reaching climate change bill, including an amendment that would allocate $30 million to the electric vehicle incentives.

“If we are going to be serious about climate change, we have to tackle the transportation sector,” said Rep. Carolyn Dykema, the sponsor of the amendment and former vice chair of the transportation committee. “The EV program is one important way we can do that.”

As of 2016, the transportation sector was responsible for nearly 43% of the state’s carbon emissions. 

The Massachusetts Offers Rebates for Electric Vehicles (MOR-EV) program launched in 2014 as part of the state’s efforts to slash emissions. The state has declared a goal of putting more than 300,000 electric vehicles on the streets by 2025 and having all the vehicles sold in the state be electric by 2040. Currently, there are just over 18,000 electric vehicles on the streets. 

The incentive program initially offered rebates of $2,500 on the purchase of new electric vehicles. It steadily grew in popularity until, by September 2018, it was paying out $2 million in rebates each month. Along the way, the program was several times on the verge of running out of funds, before receiving new infusions of money, generally smaller sums from $2 million to $12 million.

In total, the program has received about $30 million, largely drawn from the state’s portion of the proceeds from the Regional Greenhouse Gas Initiative

In December 2018, as funding ran low again, the state announced that, in 2019, rebates would drop to $1,500 and plug-in hybrids and zero-emission motorcycles would no longer be eligible. The program was then slated to wrap up at the end of June. 

The number of consumers taking advantage of the program spiked to more than 1,500 in December, then plummeted in the following months; in June, just 248 people applied for rebates. 

Earlier this summer, the state declared the program would be extended a final time and then come to an end in September, an announcement met with dismay from environmental groups. 

“If we have any shot at avoiding the worst climate scenarios, then we have to get our transportation emissions in check,” said Gina Coplon-Newfield, director of the Sierra Club’s clean transportation campaign. “A rapid switch to EVs is one of the most important ways that we can slash those emissions.”

In the spring, supporters of the incentives proposed budget amendments to fund the program, but these efforts were not successful. 

Then, in late May, House Speaker Robert DeLeo introduced a bill known as GreenWorks, a $1.3 billion package of measures that promises to fund climate adaptation and renewable energy projects by issuing bonds. Dykema saw the bill, which DeLeo has made a high priority this session, as a natural opportunity to secure more funding for MOR-EV, she said. Her amendment would increase the rebate to at least $2,500 and no more than $5,000.

Ensuring the program continues — and increasing the rebate — is essential if the state is serious about pursuing its electric vehicle adoption goals, advocates said. 

“We know that consumer rebates are an important incentive for consumers to make the switch,” Coplon-Newfield said. “It is a lifeline.”

The power of incentives has been proven in other countries, most notably Norway, where more than half of new vehicles purchased are electric, thanks to a hefty tax break that makes buying a Volkswagen eGolf or a Nissan Leaf a financial win. 

The Massachusetts rebate would apply only to the purchase or lease of a new electric vehicle with a sales price of no more than $40,000. The price cap, Dykema said, ensures the money is not going to consumers who could easily afford an electric vehicle without a subsidy. It will also help the funding last longer and therefore do more good, she said. 

Larry Chretien, executive director of the nonprofit Green Energy Consumers Alliance, said the limit makes sense. 

“If you can afford more than $40,000, maybe you don’t need the $2,500,” he said. “I think that’s a fairly good barometer of the middle class.”

Since the program began, nearly 5,500 of the vehicles to qualify for the rebate — more than one-third of the total — have been Teslas. While the Tesla 3, the company’s least expensive model, boasts a sticker price of about $39,000, the addition of almost any options bumps the cost over the $40,000 threshold. All other Tesla models are considerably pricier. 

Historically, advocates have pushed for changes to the rebate program that would make electric vehicles more accessible across income levels. They’ve proposed measures such as including used car purchases in the program, creating larger rebates for lower-income buyers, and making the rebate automatic at the time of sale. While the current bill is essential, they said, more needs to be done.

Dykema is open to the possibility of these kinds of changes in the future, she said. 

“If there are ways we can improve the program, absolutely we should be looking at those things,” she said. “When it comes to tackling climate, I think we need to be looking at anything and everything.”

The bill now goes to the state Senate for consideration.