Washington State’s $45 Million EV Rebate Program Nears Exhaustion As Popularity Soars

Washington state’s electric vehicle (EV) instant rebate program has proven so popular that it is set to exhaust its $45 million in funding months ahead of schedule. 

According to the Washington State Department of Commerce, the program, which prioritizes lower-cost EV leases and aims to make EVs more accessible to low-income residents, is now expected to run out of funds in October, just three months after its August 1 launch.

Unprecedented Demand

Steven Hershkowitz, Managing Director of Commerce’s Clean Transportation Program, reported that participation has been around three times higher than forecasted. As of September 24, 2024, the program had issued 3,351 rebates, with 64% (2,145) going towards leases. The average rebate amounts to $7,292, with 55% of the program’s budget already spent.

“In real time, we are validating our research that EVs are popular with people at all income levels,” said Mike Fong, Director of the Washington State Department of Commerce. “Vehicles are rolling out of dealerships so much faster than we expected – drivers wanting to take advantage of the program should act within the next month before funds run out.”

Program Details

The Washington State Instant Rebate program offers significant incentives for EV adoption:

• Up to $9,000 for new EV leases of three years or more
• Up to $5,000 for new EV purchases or two-year leases
• $2,500 for used EV purchases or leases

To qualify, individuals must earn up to $45,180 annually, or $93,600 for a family of four. Only EVs with a sticker price below $90,000 are eligible.

Impact on Dealerships and Consumers

Car dealerships have reported a surge in EV sales and leases. Matthew Phillips, CEO of Car Pros Automotive Group, said his two Kia dealerships and one Hyundai store in the Seattle area have accounted for around 200 rebates.

“It’s been way more successful than I ever imagined it would be,” Phillips told Automotive News. “It’s just been one of the best things Washington state has done in a long time.”

The program has also attracted buyers who weren’t initially considering an EV, partly due to the current high-interest-rate environment and rising vehicle prices.

Program Effectiveness

The Washington State Department of Commerce reports that the program is on track to create $2.84 in benefits within five years for every $1 spent. This calculation accounts for:

• The social cost of carbon avoided (including positive health outcomes)
• Fuel savings from switching from gasoline to electric
• Upfront vehicle cost savings now and in three years when leased vehicles enter the used market

Notably, 90% of rebate recipients stated they couldn’t have bought or leased an EV without the rebate, far exceeding the 66% rate achieved by California’s EV rebate program for low-income participants.

Future of the Program

While no additional funding is currently appropriated for the program, more than $65 million remains in the electric vehicle incentive account for future iterations if the state Legislature chooses to continue the initiative.

The Washington State Department of Commerce website will be updated with information on the remaining funds. A specific end date for the program will be announced when funding is nearly exhausted, with at least a few days’ notice provided to dealers and buyers.

Read More: U.S. Treasury And IRS Releases New Guidelines For 30C EV Charging Tax Credit

Washington state’s EV instant rebate program has demonstrated the strong demand for electric vehicles across all income levels. As the program rapidly approaches its funding limit, it highlights both the success of the initiative and the growing appetite for EVs in the state. 

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