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Over the past several years, rebates and tax credits have been an effective tool used by automakers to sell electric vehicles (EVs) to lower the MSRP potential consumers face. The use of these incentives has helped narrow the price gap between EVs and comparable internal combustion engine (ICE) models, ultimately getting more buyers into the seats of EVs.

As we pointed out in a recent edition of Perspective, we’re starting to see budget cuts and other issues which have legislatures reducing or eliminating incentives at the state level. At the time of publication, we reported Illinois and Georgia had passed laws to end their respective $4,000 and $5,000 EV tax credits. As of July 1, California has joined the ranks of states making cuts.

California has added income-based caps to its rebates for EVs, which will actually help some lower-income buyers, but eliminate rebates entirely for the wealthy.

Prior to July 1, the California Clean Vehicle Rebate program was worth $1,500 for plug-in hybrids, and $2,500 for electric cars. However, now those with incomes less than 300 percent of the Federal Poverty Limit will qualify for rebates up to $3,000 for a plug-in hybrid or $4,000 for an electric car.

On the opposite end of the income spectrum, buyers with annual incomes over $250,000 will no longer be eligible for incentives on either plug-in hybrids or electric cars. However, despite having the plug pulled on EV incentives, these buyers still qualify for a $5,000 rebate on hydrogen fuel-cell vehicles.

California’s rebate adjustment makes sense because affluent EV buyers willing to shell out over $100,000 for a performance-oriented hybrid — like Tesla’s Model S or Porsche’s Panamera S E-Hybrid — probably won’t be fazed by the loss of this credit. However, the added bump in rebates for lower income buyers might be enough to allow them to afford something like Nissan’s Leaf, which starts at $29,860 before any credits.

Since its inception in 2010, California’s Clean Vehicle Rebate Program (CVRP) has issued more than $235 million in rebates. For the 2015 – 2016 fiscal year, the CVRP got a boost in funding from $121 million, to $163 million.