Currently in Michigan, 0.32% of passenger vehicles on the road are electric. Though this small percentage reflects relatively low electric vehicle adoption, there are huge benefits to electrifying the transportation sector such as cleaner air to breathe and savings at the gas pump, especially as gas prices tip over $5.00 per gallon.
Incentives are an effective tool to increase real-world EV adoption.
Currently, 13 of the 20 states that have greater than 0.5% EV market share offer some form of electric vehicle incentive. Of the states with more than 0.75% EV adoption, all but 1 offer an incentive for clean vehicles.
Other states, including a few in the Midwest, offer EV incentives, rounding the number of incentive-offering U.S. states to 23. Illinois will offer a $4,000 rebate for the purchase of a new or used electric vehicle starting on July 1, 2022. In Pennsylvania, residents can receive a rebate of up to $1,000 to purchase or lease a new or pre-owned EV, fuel cell, or natural gas (CNG) car. Additionally, residents that meet the low-income threshold are eligible for another $1,000 rebate in Pennsylvania.
Incentives also demonstrate state leadership
Currently, Michigan does not offer any incentives to help the average consumer purchase an electric car. In fact, we currently have a disincentive in the form of higher yearly vehicle registration taxes. At the same time, automakers are deciding where to site new battery facilities and build new electric vehicle models. It makes sense to invest in states and communities that are supportive of the technology they are building. We want to keep Michigan a leader in the automotive industry and keep automotive jobs in our hometowns. Funding an electric vehicle incentive program would show that Michigan is serious about embracing the future of the automotive industry, which is increasingly transitioning to zero-emissions. This incentive is an opportunity to stand up and plant our flag in the ground.
The State Budget Offers an Opportunity to Create an Incentive Program
The Fiscal Year 2023 State Budget presents an opportunity to bring Michigan up to speed with the progress that other states have made. One proposal, if funded, would create a rebate program for passenger electric cars and at-home charging stations. The program would offer a $2,000 rebate toward the purchase of a new passenger electric car as well as $500 to help with the cost of an at-home charging station.
The total cost of the proposal is $50 million – a drop in the bucket compared to the entire state budget. We urge Michigan lawmakers to consider this proposal to help Michiganders buy and drive the vehicles that automakers – many of whom call Michigan home – are bringing to the market.
Best Practice for EV Incentives
As with other policies, not all incentives are created equally. The best incentive programs:
- Are available to new, used, and leased battery electric and plug-in hybrid vehicles
- Are available at the point of sale
- Have enough funding to lock in the incentive for several years
- Are relatively simple for consumers and dealers to understand
- Have considerations for need-based criteria eligibility tiers or limits based on income or vehicle price
To learn more, check out our fact sheet here.
Clean Fuels Michigan looks forward to continuing and facilitating the discussion between legislators and the community to ensure that Michigan remains a national leader in the transportation industry. Electric vehicle incentives are an essential step in the right direction.
