Federal subsidies for electric vehicle purchases are coming to an early end. The $4,000 to $7,500 tax credits range for new or used EVs stem from legislation signed by former President Joe Biden in 2022. Though initially approved through 2032, President Donald Trump approved an early termination of the credits with the budget reconciliation bill he signed in July. Now they expire at the end of September.
In recent years, Washington state has adopted some of the nation’s most aggressive timelines for cutting tailpipe emissions, including a target of ending the sale of new gasoline powered passenger vehicles other than hybrids by 2030 and a firmer deadline of 2035 that it shares with California.
From August to October of 2024, the WA State Dept. of Commerce ran a state EV subsidy program with $3,000- $9,000 rebates on EV’s to buyers within 300% of the federal poverty line. A family of four bringing in $93,600 or less in 2024 could qualify. The agency dispersed the $45 million in available funding sooner than expected as the EV buyers flocked to take advantage of the rebates.
Steven Hershkowitz leads the clean transportation division at WA Commerce and is one of the key decision makers working to implement the state’s clean transportation strategy. In a recent interview at TVW, Hershkowitz touted Washington’s progress towards electrifying the transportation sector.
“We’re number three in the country in new EV market share; number two, as it relates to bigger vehicles,” said Hershkowitz.
Environmental policy skeptic Todd Myers of the Washington Policy Center argues that EV subsidies are not an efficient carbon cutting policy.
“A high percentage of the money simply goes to people who are going to buy electric vehicles anyway,” said Myers. “The EV credit program, both at the state and federal level, has really been ineffective at reducing CO2 emissions.”
Myers doubts that keeping the EV tax credits alive would help Washington achieve its environmental targets.
According to Hershkowitz, there was a surge of EV registrations in Washington from 2022 into late 2023 when they dropped off significantly. While he doesn’t think the big rebates from Uncle Sam were the only factor driving the uptick, they certainly helped.
“That was really driven by Tesla bringing the Model 3 and Model Y to a mass market, bringing that price down,” he added.