CARB shelves proposal to kick Tesla out of the ZEV rebate program

Last month, there was a lot of consternation about California’s ZEV, or Zero Emission Vehicle, rebate program. Launched in 2010, the program has been so successful that the state is now faced with the challenge of making the pot of money for the program go farther. There’s also a strong desire to see ZEVs spread beyond the coastal cities to the San Joaquin Valley, which has some of the smoggiest air in the nation and alarming rates of asthma.

One idea initially floated by staff at the California Air Resources Board: put a $60,000 MSRP cap on electric vehicles that would qualify for the $2,500 state rebate. In other words, banish Tesla’s Model S sedan and the Cadillac ELR from the popular program. See page 12 of this PDF from CARB from April.

This idea didn’t sit well with Tesla or its legions of fans. Tesla is headquartered in Palo Alto, manufactures the Model S in Fremont, recently leased another facility in Lathrop, employs thousands of people in the state and has roughly 1,200 job openings worldwide listed on its website.  Nor does the environment discriminate between price: the overall point of the ZEV program is to remove fossil fuel-burning cars from the road.

“This ‘minor’ change appears to be an intentional hurdle thrown into the EV industry, which should have all of our support,” wrote one commenter about the proposed changes. “The only reason to slow the growth of clean transportation is for the benefit of the oil industry. Shameful.”

Late Friday, before the long Memorial Day weekend, CARB released the 2014-2015 funding plan for the program. It’s a long document, but the upshot: the $60,000 MSRP cap is no longer part of the staff proposal, and the state rebate will drop from $2,500 to $2,000. The new proposal goes before the ARB board for consideration June 26.

Since California is feeling left out of the fierce race to land Tesla’s Gigafactory for battery production, I’ve wondered if the original CARB plan was a thorny issue in ongoing Gigafactory negotiations.

Meanwhile, other efforts to further electrify California’s transportation system, particularly in low-income communities, are moving ahead. There’s momentum behind Senate Bill 1275, known as the “Charge Ahead California” bill. Pro Tip: Max Baumhefner, an attorney at the NRDC, has a great synopsis on his blog.

A Tesla Model S sedan. Photo by the San Jose Mercury News.

Dana Hull Dana Hull (229 Posts)

Dana Hull covers clean technology and energy policy for the San Jose Mercury News. She often writes about electric vehicles, the smart grid, the solar industry and California energy policy, from RPS goals to Gov. Jerry Brown's big dreams for distributed generation.