Texans soon will have a shot at a $2,500 rebate when buying electric or natural gas vehicles in the state, after regulators pushed the new program a step further on Wednesday.
When combined with federal incentives, a buyer of an electric car could save $10,000 off the total purchase price of the vehicle because of the new program. The incentive is the first such offer for the buyers of electric vehicles in the state.
“I wish I could afford a new car,” said Toby Baker, a member of the Texas Commission on Environmental Quality, as he approved moving the program forward.
The commission is still developing rules for the rebates, which won’t be available until April, at the earliest. The Legislature approved the incentive program this year, but only allocated about $3.8 million annually for the rebates.
The $3.8 million annual funding for incentives has forced the commission to limit the rebates to 1,550 purchases each year. The rebate program is slated to expire on Aug. 31, 2015.
Buyers of natural gas vehicles, including some that can run on either natural gas or gasoline, will likely be encouraged by the rebates, said Lynn Lyon, director of fuel market development for the natural gas producer Pioneer Natural Resources and leader of an industry-backed initiative to encourage more refueling stations in Texas.
Natural gas vehicles, like the new Ford F-150 natural gas option, can cost about $7,000 more than their gasoline-only counterparts, Lyon said.
“It’s a steep investment and I think that high-mileage drivers will get the return on investment in a reasonable time period, but that incentive can make a difference to a lot of people who are interested in the vehicles,” Lyon said.
Funding for the incentives comes from vehicle registration fees. Some of those funds have been set aside for emissions-reduction programs for years, with tens of millions of dollars left unspent annually because the Legislature has not allocated more funding to the programs, according to the commission. A state account set aside to fund emissions reduction programs has more than $587 million that the Legislature has not allocated, according to the agency.
“Really, our aim is that in 2015 we get the Legislature to loosen the purse strings and actually spend this money for its intent,” said Cyrus Reed, conservation director for the Sierra Club’s Lone Star chapter.
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The commission’s decision on Wednesday gives officials the green light to work with manufacturers in assembling a list of vehicles that will qualify for the program.
Most electric and natural gas vehicles sold by dealers will qualify, according to the commission.
A notable exemption will be Tesla electric vehicles, since the manufacturer sells them directly to customers rather than through dealerships.
Officials also will need to determine the starting date for the incentive program, with initial plans to finalize the rebate plan on April 9. The commission will not know an exact date that vehicle purchases will be eligible for the program until early next year, said Guy Hoffman, the agency’s risk manager for its emissions-reduction program.
The start date will likely be late April or early May, with vehicles purchased on or after the start date eligible for the rebates, Hoffman said. The commission will post the date on its website, as well as a list of qualifying vehicles, he said.
Dealerships will have access to a hotline to confirm that the rebates are still available when they sell eligible vehicles, and a counter will be visible online to show consumers how many incentives remain, Hoffman said. Rebates could go to the dealer, reducing the buyer’s purchase price, or directly to the buyer.
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Cars that will qualify include pure electric vehicles, plug-in hybrids, and vehicles fitted to run on natural gas only, or natural gas and gasoline, such as the upcoming Chevy Impala natural gas option or the Ford F-150 natural gas version.
The U.S. Environmental Protection Agency offers a tax incentive of up to $7,500 for most electric cars.