Accelerating the market for clean air vehicles is a cornerstone of California’s long-term strategy to reduce air pollution and green house gas emissions, save consumers money, and solidify the state’s place as a technology hub for clean car manufacturing and development. AB 220 will provide a significant financial incentive to buyers of electric vehicles and plug-in hybrid vehicles by exempting them from the state sales tax.
AB 220 exempts the purchase of Clean Air Vehicles from the state sales and use tax, saving the consumer 6.5 percent of the purchase price. The average savings to the consumer would be $2973. Vehicles eligible for this tax incentive include all-electric vehicles, compressed natural gas vehicles, hydrogen fuel cell or internal combustion vehicles, plug-in hybrid electric vehicles, and liquefied petroleum gas vehicles.
“Widespread use of clean vehicles is absolutely key to reducing greenhouse gas emissions, but we need to do more to motivate the public to purchase them,” Ting said. “Financial incentives are the proven best way to steer consumers to choose clean cars,” he added.
Under the measure, the sales tax and vehicle license fee exemptions would be available to purchasers of the types of vehicles identified in existing law as eligible for free access to High Occupancy Vehicle (HOV) lanes. As an illustration of the point that sales of clean cars are not happening at a quick enough pace, fewer than 10,000 of the 40,000 HOV “stickers” available to plug-in hybrid drivers for the HOV access privilege have been claimed. The financial incentives provided through the legislation will remain in effect for just one year, January 1, 2014 to January 1, 2015, to coincide with the expiration of the HOV access program for these same vehicles.
In addition, the legislation will contain a directive to the state Department of General Services to allow EVs and plug-in HEVs to park free of charge in state of California parking lots and facilities.
“Taken together, these financial incentives and parking benefits will incentivize the purchase of clean vehicles, and further establish California as a manufacturing hub for clean cars and related technologies. They will also position our economy to benefit from the green jobs associated with this emerging industry,” Ting said.
Quick facts on Electric Vehicles and Hybrid Electric Vehicles:
- According to the US Environmental Protection Agency, electric vehicle usage emits only a quarter of the pollutants as the average new car—this includes emissions from electricity production used to charge the car.
- All major automakers have plans to introduce electric vehicles by 2015, with some already on the market, such as the Nissan LEAF, Chevy Volt, Toyota Prius Plug-In Hybrid, and Ford Focus Electric. Those manufactured in California include the CODA Sedan, Fisker Karma, and Tesla Model S Sedan.
- Under the ARB requirements on the “big six” auto makers, a manufacturer that sells 100,000 vehicles a year in California is required to sell at least 1,000 battery-powered electric cars with a 100-mile range per year starting in 2015.
- According to the Department of Motor Vehicles, there are 117,092 electric vehicles registered in the State. *As proposed to be amended