State and Local Policy Database

Incentives for High-Efficiency Vehicles

The high cost of advanced-technology fuel-efficient vehicles is a major barrier to their entry into the marketplace. To encourage consumers to purchase these vehicles, states may offer a number of financial incentives, including tax credits, rebates, and sales tax exemptions.

No policy in place or proposed.

Last Updated: July 2015

No policy in place or proposed.

Last Updated: July 2015

Electric vehicles in Arizona pay a significantly reduced vehicle license tax as part of the state’s Reduced Alternative Fuel Vehicle License Tax program. The vehicle license tax on an AFV is $4 for every $100 in assessed value. 

Last Updated: July 2015

No policy in place or proposed.

Last Updated: July 2015

AB 118 funds a voucher program, targeted at medium- and heavy-duty trucks, whose goal is to reduce the upfront incremental cost of purchasing a hybrid vehicle. Vouchers range from $6,000 to $45,000, depending on vehicle specifications, and will be paid directly to fleets that purchase hybrid trucks for use within the state.

California also offers tax rebates of up to $2,500 for light-duty zero emission electric vehicles and plug-in hybrid electric vehicles on a first come, first served basis, effective until 2023.

Last Updated: July 2015

In 2013, the state of Colorado extended H.B. 1331 to provide financial incentives to purchasers of efficient motor vehicles out to 2021. Consumers can claim up to $6,000 in tax credits for the purchase of a hybrid, plug-in hybrid or alternative fuel vehicle. Individuals that convert a personal vehicle to plug-in hybrid technology can claim up to $7,500. Credit amounts are dependent upon the incremental or conversion cost of the alternative fuel or hybrid vehicle. Credits are also available for the purchase of all-electric or plug-in electric medium- and heavy-duty vehicles

Last Updated: July 2015

Connecticut’s Hydrogen and Electric Automobile Purchase Rebate Program provides as much as $3,000 for the incremental cost of the purchase of a hydrogen fuel cell electric (FCEV), all-electric, or plug-in hybrid electric vehicle. Rebates are calculated based on battery capacity. Vehicles with a battery capacity of 18 kilowatt-hours (kWh) of more earn $3,000 while those with capacities between 7 kWh and 18kWh earn $1,500. Vehicles with batteries smaller than 7 kWh are eligible for a rebate of $750.

Last Updated: July 2015

The Delaware Clean Vehicle Rebate Program offers rebates for alternative fuel vehicles. The rebate amount ranges between $1,000 and $2,200 depending on the type of vehicle: new plug-in, conventional converted, etc. The total budget of the program is $330,000. The rebate limits are set to one per individual and five per fleet. Only residents and organizations from the state of Delaware are eligible to participate in the program. 

Last Updated: June 2016

The District of Columbia allows owners of Alternative Fuel Vehicles (AFV) and vehicles that achieve an estimated average city fuel economy of 40mpg according to the EPA to be exempt from vehicle excise taxes. Reduced vehicle registration fees also apply to owners of such vehicles.

Last Updated: July 2015

No policy in place or proposed.

Last Updated: July 2015

An income tax credit is available to individuals who purchase or lease a new Zero Emission Vehicle (ZEV). A ZEV vehicle is defined as a vehicle that has zero tailpipe and evaporative emission. The amount of the tax credit is 20% of the vehicle cost, up to $5,000 and is available through the state's Alternative Vehicle Tax Credit program.

Last Updated: July 2015

No policy in place or proposed.

Last Updated: July 2015

No policy in place or proposed.

Last Updated: July 2015

Illinois indefinitely suspended the Alternate Fuels Rebate Program in 2016. 

Last Updated: June 2016

No policy in place or proposed.

Last Updated: July 2015

No policy in place or proposed.

Last Updated: July 2015

No policy in place or proposed.

Last Updated: July 2015

No policy in place or proposed.

Last Updated: July 2015

Electric vehicles purchased in Louisiana qualify for a tax credit that amounts to 50% of the incremental cost of the vehicle. Tax payers may alternatively qualify for a tax credit equivalent to the lesser of 10% of the cost of the purchased electric vehicle or $3000.

Last Updated: July 2015

No policy in place or proposed.

Last Updated: July 2015

Purchasers of qualifying all-electric and plug-in hybrid-electric light-duty vehicles may claim up to $3,000 against the vehicle excise tax in the state of Maryland, depending on the battery weight of the vehicle. 

Last Updated: July 2015

The Massachusetts Offers Rebates for Electric Vehicles (MOR-EV) Program offers rebates of up to $2,500 to customers purchasing PEVs. 

Last Updated: July 2015

No policy in place or proposed.

Last Updated: July 2015

No policy in place or proposed.

Last Updated: July 2015

No policy in place or proposed.

Last Updated: July 2015

No policy in place or proposed.

Last Updated: July 2015

No policy in place or proposed.

Last Updated: July 2015

No policy in place or proposed.

Last Updated: July 2015

No policy in place or proposed.

Last Updated: July 2015

No policy in place or proposed.

Last Updated: July 2015

All zero emission vehicles (ZEV) in the state of New Jersey are exempt from state sales and use taxes.

Last Updated: July 2015

No policy in place or proposed.

Last Updated: July 2015

The state of New York started the New York Truck Voucher Incentive Program in 2013. Vouchers of up to $60,000 are available for the purchase of hybrid and all-electric class 3-8 trucks.

Last Updated: July 2015

No policy in place or proposed.

Last Updated: July 2015

No policy in place or proposed.

Last Updated: July 2015

No policy in place or proposed.

Last Updated: July 2015

No policy in place or proposed

Last Updated: July 2015

No policy in place or proposed.

Last Updated: July 2015

The Alternative Fuels Incentive Grant (AFIG) Program provides rebates of up to $3,000 for qualifying electric and plug-in hybrid vehicles but expires in June, 2016. 

Last Updated: June 2016

The Driving Rhode Island to Vehicle Electrification (DRIVE) rebate program offers rebates for vehicles purchased on or after January 29, 2016. The amount of the rebate ranges from $500 (battery capacity less than 7 kWh) to $2500 (battery capacity over 18 kWh). 

Last Updated: June 2016

South Carolina offers up to $2,000 in tax credits for the purchase of a plug-in hybrid electric vehicle. The credit is equal to $667, plus $111 if the vehicle has at least 5 kWh of battery capacity, and an additional $111 for each additional kWh above 5 kWh.

Last Updated: July 2015

No policy in place or proposed.

Last Updated: July 2015

On May 21, 2015, Tennessee launched a two-tiered rebate program on qualifying electric vehicles that are purchased or leased and registered in the State of Tennessee. Electric vehicle dealerships are responsible for providing the rebate to consumers. Rebates of $2,500 are offered for zero-emission battery electric vehicles and rebates of $1,500 are available for plug-in hybrid electric vehicles sold or leased (with a three-year minimum lease term) by a Tennessee dealership to Tennessee residents, after a claim is filed by the dealership.

Last Updated: June 2016

No policy in place or proposed.

Last Updated: June 2016

Through 2016, all-electric vehicles are eligible for an income tax credits of 35% of the vehicle purchase price, up to $1,500, Plug-in hybrids qualify for a tax credit of $1,000.

Last Updated: July 2015

No policy in place or proposed.

Last Updated: July 2015

No policy in place or proposed.

Last Updated: July 2015

Electric vehicles are exempt from state motor vehicle sales and use taxes under the Alternative Fuel Vehicle Tax Exemption program.

Last Updated: July 2015

No policy in place or proposed.

Last Updated: July 2015

No policy in place or proposed.

Last Updated: July 2015

No policy in place or proposed.

Last Updated: July 2015