CARB Rethinks Booting Tesla Model S and Cadillac ELR From Rebate Program

3 years ago by Jay Cole 21

Confident In The Knowledge That $2,500 Will Be (Theoretically) There For You....Go Ahead And Buy That Tesla!

Confident In The Knowledge That The $2,500 Rebate Will Be (Theoretically) There For You….Go Ahead And Buy That Tesla!

Cadillac ELR Buyers, Known For Being Cost Conscious Now Look To Be In The Clear

Cadillac ELR Buyers, Known For Being Cost Conscious Now Look To Be In The Clear

It has been no secret that the CARB-based $2,500 rebate program for electric vehicles has been struggling to come up with the funds to match plug-in sales.

To ease the pressure on the program, we reported last month that CARB considering implementing a maximum MSRP threshold to qualify of $60,000; essentially scratching California’s best selling EV from last year, the Tesla Model S from the list.

These changes would also exclude the newly released Cadillac ELR, and the dozens per month GM sells in the state.

Quite honestly our first reaction to CARB’s funding problem was – “great, the program has worked out really well,” as opposed to ‘lets try and keep the wheels on the bus as long as we can‘ by narrowing the criteria.

We understood the reasoning, but the main goal at the end of the day was to get petrol burning vehicles off the roads and replace them with plug-in vehicles.

Previous CARB Statement on the Topic

Previous CARB Statement on the Topic

Earlier CARB Graphic on the Topic

Earlier CARB Graphic on the Topic

Unsurprisingly, it turned out that proposed changed didn’t sit well with new minted “#1 automotive employer in California” Tesla Motors or its massive public support base; and when Dana Hall at Silicon Beat decided to follow-up and revisit the issue, the proposed changes to the $60,000 MSRP cap had quietly been lifted (PDF here)

The current proposal reads: “Although vehicle manufacturers are responding to market needs by offering lower price points, rebates can be a deciding factor in many consumers’ ability to purchase or lease these cleaner vehicles. Based on these considerations and stakeholder feedback, at this time staff is not proposing any significant changes to the Clean Vehicle Rebate Project as part of this year’s Initial Funding Plan.”

Silicon Beat approached David Clegern, a spokesman for CARB to comment on the changes, “It’s fair to say its been removed…I never say anything is dead until after the vote, but I’m not aware of any plans to revisit it.”

Silicon Beat

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21 responses to "CARB Rethinks Booting Tesla Model S and Cadillac ELR From Rebate Program"

  1. MTN Ranger says:

    I first knew it was a Jay article by reading the photo captions.

  2. scott franco says:

    What a relief, I can buy a Tesla now…..

    Oh wait, I am poor.

  3. ggpa says:

    “California’s best selling EV from last year, the Tesla Model S”

    Is this accurate, then it is amazing that Model S beat Leaf in 2013.

    1. Bonaire says:

      I would imagine Leaf sold more units in CA last year. Surprised if not.

    2. Tesla delivered ~8400 Model S’s in California in 2013.
      For the US as a whole, Nissan delivered 22,610 LEAF’s and Tesla delivered 17,650 Model S’s.

      For exceed Nissan to exceed Tesla Model S deliveries in California, it would have to had delivered greater than 37% of all US LEAF’s to Californa. Either way, both Nissan and Tesla are leading in Californa (over 1.4% of all vehicles were BEVs) in 2013.

    3. ggpa says:

      Brian / Bonaire

      Thanks for weighing in on this amazing statement, but I guess this is a case of “extraordinary claims need proof”.

      Until somebody can show that Model S sold more than Leaf in California in 2013, I think it makes sense to assume otherwise.

      It is time for Jay Cole to show his numbers.

  4. David says:

    Who came up with the idea of excluding Tesla? Who contributes to them or pays them? Follow the money trail.

    1. liberty says:

      I would think if you wanted more electic miles, you would cut out that prius phv, with what 11 blended miles. Wait. Toyota is part of the fuel cell lobby, that wants 9 credits for 4 for a tesla and 3 for a i3 and leaf. Its CARB’s alegiance to fuel cells that had to be behind the maneuver.

  5. Bonaire says:

    Allow the MS 60 in the program. The issue at Tesla is battery limits so incentivise buyers to spread the batteries out among more cars.

  6. Francis L says:

    I don’t see any good reason to disqualify high-end EVs. CARB isn’t a rebate for the consumers, it’s a bonus for car makers. If the CARB go away, the MSRP will probably drop pretty quickly to keep sales high. If there is too much EV sales, CARB should start thinking about lowering the rebate for all cars, not only for Tesla.

    1. Mint says:

      No, overall it works the other way around. If the incentive is withdrawn and sales go down, there will be less interest from manufacturers, fewer EVs offered, and thus less competition. That means higher MSRP.

      Furthermore, it’s true of all car models that lower volume requires higher gross margin (or else you can’t cover fixed costs like R&D or tooling).

  7. MikeM says:

    I must be missing something here.
    Let’s see:

    A fixed pool of funds.
    Cut off the high priced vehicles.
    Result: Funds now available for more vehicles.
    Slightly more EVs hit the road before funds run out.

    Isn’t this the objective we all have?
    And how does this really result in reduced sales (per Table 6)?

    (A gold star will be awarded to whoever finds the logic flaw in the above reasoning).

    Seriously though, cutting off a smaller number of high-end buyers who don’t need a bonus and funneling it to a larger number of low-enders who do seems like a no brainer.
    I’d be curious to know who the “stakeholders” where who influenced the reversal.

    1. Note Tesla sells more vehicles that than lower combined volume of the lower 9/15 PEVs sold. Tesla is in top 3 PEVs based on quarterly deliveries.
      http://insideevs.com/monthly-plug-in-sales-scorecard/

      Nothing “small” about Tesla’s numbers as a percentage of ZEVs delivered in California. Tesla is in a position that demand for their vehicles exceeds supply, and I think CARB recognizes the situation. CARB needs ZEVs sales in CA more than Tesla needs to sell ZEVs in CA!

    2. Joshua Burstyn says:

      If competitors had a vehicle with the same range, perhaps that would make sense.

      Many buyers select a Model S based on the range, not the cost!

    3. JakeY says:

      “A fixed pool of funds.”
      This premise is already wrong. Right now the program does not run under a fixed pool of funds. Instead it runs at a “debt”, meaning it accepts rebate applications with no limit, and issues rebates at a first come first serve basis (and owes money to the rest). That means if you cut off the more expensive cars from even applying for this rebate, there will be a real loss in EV sales.

      “Result: Funds now available for more vehicles.
      Slightly more EVs hit the road before funds run out.”
      Again wrong premise here. All EVs get $2500 regardless of price. You do not fund a higher number of EVs by cutting off the more expensive ones. The number of EVs funded will remain the same, it’s just the “effectiveness” might be different.

  8. Lou says:

    Bonaire:
    I see Teslas every week here in the Philly suburbs. Not so often do I see LEAFS. That surprises me, it really does, but it’s been my(limited)observation. Just the other day I happened to look on PlugShare and noticed how many Tesla owners there are in my area. Just based on the app, you’d think that Teslas are the only EV’s sold. Philly is NOT a hot spot for EV’s in general, but we are seeing Teslas.

    Lou

  9. Nix says:

    When Tesla production finally catches up with demand, we will start seeing the incentives pass through to second buyers, like in other EV’s.

    For example, when you buy a used Leaf, you tend to get a good chunk of the State and Federal incentives passed onto you in the form of lower used car prices.

    Once that starts happening with Tesla’s, then any excuse about subsidizing rich people to buy expensive cars goes right out the window. Because the state and federal subsidies actually are getting passed onto moderate income folks buying in the used market.

  10. Just_chris says:

    To my very simple mind the program has been really successful and now its time to change its focus. There is a fixed pool of money (there always is) how can you best use that money to drive the market? Is a straight across the board subsidy the best (cheapest) way? probably not

    The 2 reasons for not buying an EV that are constantly mentioned are range and up front cost surely encouraging the market to tackle these should be the priority. How about only offering the $2.5k off any car under $40k (thus enticing BMW and Merc lower their asking price) and then offering a $5k rebate for the first x00,000 cars sold that have over 150 mile range but cost less than $35k? The EU have been very successful at driving down the CO2/km of cars on the market by setting a target that is not too far away from where most manufacturers are and then leaving it up to them to try and find a way to hit it. IMO this is a better strategy for getting stuff done than encouraging the purchasing of existing models.

  11. qwerty says:

    They should base the rebate on the usable capacity for PHEV’s. Do the same for BEV’s as well.
    Some PHEV’s use only ~64% of their pack which means they are lugging around the other 36% and wasting energy doing so.

    Why help promote the wasteful?

    1. ModernMarvelFan says:

      By your logic, why log all the additional seat and capacity around when you don’t need it.

      Your logic is just silly.

      This is no different from BEVs default to charging up to 80% only.

      it is there to protect the battery.

      So, please spare the attack on Volt like you have repeatly done here.

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