SACRAMENTO — California is slated soon to reinstate funding for subsidies that encourage drivers to buy electric cars, a program advocates say will help the state prepare for Gov. Gavin Newsom’s order to ban the sale of new gas-powered cars by 2035.
But who exactly will get rebate checks has created a divide between some state legislators and environmental activists, who say more money should be directed to help low-income drivers go electric.
Under the budget legislators sent Newsom last week, the state will spend $525 million over three years on its main rebate program, which offers electric car buyers incentives of around $2,000 on new electric vehicles.
The governor is expected to sign off on the legislation, even though the subsidies end up going mostly to buyers with annual incomes above $100,000.
Newsom had previously proposed to eliminate the payouts and shift spending to programs encouraging low-income people to trade in older, heavily polluting cars. At the time, he said the move would show “it’s not just about expensive, fancy cars, and the rest of us are left behind.”
To the dismay of some advocates, he reversed course under pressure from legislators and lobbyists. “It shows that equity is still just a talking point,” said Román Partida-Lopéz, an attorney at the Greenlining Institute, which fights for racial justice in environmental policy.
Yet there are differing perspectives among progressives. Some disagreed with the governor’s plan to scrap the general EV subsidies — regardless of who the buyers are — because doing so could undermine California’s ambitious climate goals. Nearly two-thirds of electric car buyers in the state have received the rebates over the past decade.
The state’s new budget sets aside $400 million over the next three years for transportation equity projects, including for Clean Cars 4 All, a grant program that gives low-income buyers up to $9,500 to trade in their gas cars and buy new or used electric models.
State Sen. Bob Wieckowski, the Fremont Democrat who chairs the budget subcommittee on environmental protection, said the budget strikes a balance between equity efforts and incentives for the general public. He stressed the state has only 14 years to transform its auto sector to meet Newsom’s 2035 order — and only about 9% of vehicles sold statewide today are electric, including plug-in hybrids.
“We’ll never make it,” Wieckowski said. “It’s not the time to close down the shop. You’ve got to have incentives (for) everybody.”
The state’s general rebate program is its most popular: Money for the program ran out in April, a near-annual event since the state rebates began in 2010, and about 5,000 buyers are on the dreaded waiting list.
But much of that money has gone to the same type of buyer: successful men living in affluent pockets of the Bay Area and Los Angeles. According to an analysis by The Chronicle, those who got rebates in recent years are about 68% male, and nearly half are white. More than 70% had a household income above $100,000, and half had an income above $150,000.
Newsom’s office did not directly comment. A spokesperson for the California Air Resources Board, the state’s air-quality agency, said the budget will “help the state meet the strong demand for electric vehicles, which continues to grow — particularly among lower income consumers.”
Historically, California has spent far more money on its rebate program for new electric car buyers than on purely equity-focused efforts. The program, the Clean Vehicle Rebate Project, has received nearly $1 billion in state funding since 2010.
By comparison, about $115 million has been spent on Clean Cars 4 All since the program began in 2015, though participants in the program can use both subsidies.
Bahram Fazeli, director of policy at Communities for a Better Environment, an advocacy group focused on environmental equity, said the disparity is a moral failing. He said low-income people of color should receive subsidies first because they often live in the highest-polluted communities, next to freeways, oil wells and refineries.
“They have, with their bodies, been impacted by the adverse health impacts of fossil fuel,” Fazeli said. “It’s an ethical concern. It’s a value statement.”
Advocates for more equity-driven subsidies said the issue is also a matter of economics: They argue many buyers receiving payouts under the state’s larger program are “freeriders,” or wealthier people who already plan to buy a Tesla or another pricey model and don’t need a subsidy.
Currently, married couples that earn less than $300,000, or $150,000 for single tax filers, can qualify for rebates for battery-electric cars under the state’s program.
Bill Magavern, policy director at the Coalition for Clean Air, said California is wasting money and not getting more electric cars on the road by giving incentives to people who don’t need them. He said subsides for people with modest means are more likely to encourage someone to switch to a cleaner car.
“You’ve got people who are going to buy that Tesla whether or not they get the rebate,” he said of more affluent drivers. “We should be helping people who really need the assistance in order to get out of a polluting car.”
But some legislators and electric car advocates say rebates are still a crucial carrot to nudge skeptical buyers of any income level to try an electric model.
“You have to incentivize the people that are buying cars; it’s the middle-class person,” Wieckowski said. “You don’t stop a popular program.”
Dustin Gardiner is a San Francisco Chronicle staff writer. Email: dustin.gardiner@sfchronicle.com Twitter: @dustingardiner
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California is restoring electric car rebates, but some environmentalists aren't happy - San Francisco Chronicle
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