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California Weighs Additional $2,000 Subsidy for Electric Cars

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Sept. 27, 2018According to a report by the Los Angeles Times, California will hold a hearing on offering a $4,500 subsidy for each pure electric vehicle sold in the state, up from the current $2,500. The move by California comes as customers of Tesla Inc. and General Motors Co. face the loss of even bigger federal credits.

The Los Angeles Times reports that the federal government now offers a $7,500 tax credit on electric vehicle purchases. The credit is designed to start ratcheting downward once the companies have grown enough to sell a total of 200,000 vehicles each. Tesla passed this threshold in July and GM is getting close.

The higher California rebates would come as President Trump is arguing that only the federal government can regulate tailpipe emission standards or mandate electric-car sales. Last month, the president also proposed freezing federal fuel economy requirements at 37 miles per gallon in 2020, instead of letting them rise to 47 mpg by 2025 as planned by President Obama. This would also freeze greenhouse gas limits, but so far, California is refusing to back down, according to the Los Angeles Times

“At the end of the day, California officials looked at the data, came to a different conclusion than Trump, and are proceeding with the authority they already have under the Clean Air Act,’’ says research director for clean vehicles at the Union of Concerned Scientists, Don Anair.

The state is able to consider an increase in its electric-car subsidy partly because revenue is becoming available as companies buy more credits to comply with the state’s low carbon fuel standard, says UC Davis transportation professor and member of the Air Resources Board, Dan Sperling, the Los Angeles Times reports. At this week’s hearing, the board will consider boosting the required low-carbon content of its transport fuels to 20 percent by 2030, from 5 percent this year.

California has formally linked its greenhouse gas targets to Washington’s since 2009. According to the Los Angeles Times, during Friday’s vote, the state will decide whether to stop doing so if the federal government starts making unilateral changes in its standards now, Sperling says.

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