Oregon’s popular electric vehicle rebate program is out of money and will remain suspended for the rest of the year, potentially impacting EV sales and the state’s greenhouse gas emissions reduction goals.
That’s after lawmakers recently failed to pass essential legislation that would have provided an additional $30 million to restart the Oregon Department of Environmental Quality’sClean Vehicle Rebate program. The program’s suspension began May 1, and funds likely won’t be replenished until March 2024.
The Clean Vehicle Rebate program offerstwo levels of rebates, up to $7,500 combined, based on a person’s income. It was designed to encourage the purchase or lease of zero-emissions vehicles as a way to reduce greenhouse gas emissions statewide. Federal rebate programs are still available to Oregonians.
Residents who have purchased an EV on or before April 30 still have six months to apply for the rebate. However, if funding runs out, residents will be put on a waiting list and receive rebates once the program is replenished.
Erica Timm is the Oregon program’s coordinator. She said the suspension is a sign of the program’s success. She said Oregonians are making the switch from gas-powered vehicles to electric ones at quicker rates compared to other states.
“Oregon is one of the top five states in terms of electric vehicle adoption. And based on previous registration sales data as well as our participation data, we know those electric vehicle sales have been growing in recent years,” she said.
Timm said recent reports show 15% of overall vehicle sales in Oregon were electric vehicles in the first quarter of 2023. As of June, the state program has issued more than $75 million in rebates to more than 27,000 applicants since the program began in late 2018,according to DEQ data.
The state’s continued suspension of its rebate program comes at an inopportune time.
Earlier this year, a report found thestate has yet to reach any of its climate benchmarks, coming short in 2020 and 2021, and needs to do more to cut emissions. The transportation sector accounts for nearly 40%of the state’s total greenhouse gas emissions, the largest single source in Oregon, according to DEQ. Despite the state recently ranking second in the nation for the share of new vehicles sold that are electric and adopting rules toban the sale of new gas-powered vehicles by 2035, the suspension could have a ripple effect on future EV sales. It could also widen the gap even more for low- to moderate-income households and communities of color, as affordability prevents access to EVs.
Timm said current projections show the program needs to double the amount it receives to prevent more suspensions. Currently, the program receives at least $12 million a year from the state’svehicle privilege tax. DEQ projects it will receive $17.5 million in total for the rebate program in 2023, but needed $30 million to meet the demand.
If the program wants to avoid another suspension in 2024, it will need about $33 million for rebates, Timm said. By 2030, it will triple to more than $90 million.
“We are currently in the process of connecting with interested parties of the Oregon Clean Vehicle Rebate program to discuss just what potential adaptations to support the long-term sustainability of the rebate program could be,” she said.
Shannon Walton-Clark, a policy manager with the electric transportation advocacy group Forth, said those conversations could lead to finding more revenue sources or drafting legislation to support the popular program.
“I think we’re all invested and focused on the same things,” they said. “It’s just about coming together, creating that collaboration during the suspension and thinking creatively about what can we do to the program.”
Walton-Clark said Forth will continue to focus on outreach, engagement and education so once the suspension is lifted, people are prepared to make the right purchase for their household.
“We can be disappointed at where we’re at right now, but I also think we can reflect at how well this program has done, and I think we need to look at the 27,000 Oregonians that have been able to make the transition to an EV,” they said.
EV sales could come to a standstill for the rest of the year, said Greg Remensperger, vice president of the Oregon Auto Dealers Association. He said when the suspension was first announced, people rushed to buy an EV before the rebate ran out.
“There was a surge prior to it happening because $2,500 or $5,000 … is a big deal,” he said.
Remensperger said some dealers saw people cancel their EV orders once the suspension began, as the rebate doesn’t kick in until the car is sold. But it hasn’t stopped some people from purchasing cars now.
“The people that truly want a car or need a car are still coming down to buy,” he said. “The people that can wait, are waiting.”
That wait could be a good thing.
He said since the pandemic hit the supply of EV inventory hard, those who wait might have a better chance of purchasing the vehicle they want, rather than getting whatever is available.
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