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.

Act 2019-2 or "Rebuild Alabama Act" establishes an Electric Transportation Infrastructure Grant Program to to fund electric vehicle transportation charging infrastructure.

The State of Alabama is currently working with a contractor to establish a Zero Emission Vehicle Supply Equipment Infrastructure Plan for the State.  Once the plan is finalized, $3,248,823.40 from the Volkswagen Settlment and $1 million in state funds have been set aside for implementation.  Additionally, another $1 million in state funds has been allocated to marketing electric vehicles.

Last Reviewed: May 2020

No policy in place or proposed.

Last Reviewed: July 2020

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 Reviewed: July 2019

No policy in place or proposed.

Last Reviewed: July 2019

AB 118 targets medium- and heavy-duty trucks in a voucher program whose goal is to reduce the up-front incremental cost of purchasing a hybrid or zero-emission vehicle. Vouchers for up to $117,000 are available through the Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP) program, depending on vehicle specifications, and are paid directly to fleets that purchase qualifying trucks for use within the state.

California also offers rebates of up to $5,000 for light-duty zero-emission EVs and plug-in hybrid EVs on a first-come, first-served basis through the Clean Vehicle Rebate Project (CVRP) program.

Clean Cars 4 All provides financial incentives to retire older, more polluting vehicles and replace them with newer, cleaner hybrid and zero-emission vehicles or alternative mobility options.

Clean Mobility Options (CMO) provides a variety of clean mobility projects (including car share, bike share, vanpool, and ridesourcing) in disadvantaged communities using advanced clean vehicles (zero-emission or plug-in hybrid electric vehicles) and associated infrastructure.

The Sustainable Transportation Equity Project (STEP) aims to address community residents’ transportation needs, increase access to key destinations (e.g., schools, grocery stores, workplaces, daycare facilities, community centers, medical facilities), and reduce GHG emissions. STEP has the flexibility to fund many different types of projects to ensure that STEP funds can help meet the needs of each community within that community’s context. STEP’s overarching purpose is to increase transportation equity in disadvantaged and low-income communities throughout California via two grant types: (1) Planning and Capacity Building Grants and (2) Implementation Grants.

CARB's Clean Mobility in Schools program is a new transportation equity project being funded through CARB’s Low Carbon Transportation Program pursuant to SB 1275 (De León, Chapter 530, Statutes of 2014). The grant program will deploy scalable clean transportation and mobility strategies for reducing GHG emissions from schools in disadvantaged communities. Strategies may include electric vehicles and electric vehicle supply equipment in schools (K – 12), car sharing for staff at schools to rotate using zero-emission vehicles, and outreach to students, parents and the community.

Financing Assistance for Lower-income Consumers offers lower-income consumers a low-interest loan and a vehicle price buy-down to purchase a new or used zero-emission, plug-in hybrid electric, or hybrid vehicle. Lenders are offered a loan loss reserve to mitigate their risk.

Last Reviewed: July 2020

Colorado offers a flat $4,000 credit for the purchase of a light-duty electric vehicle and makes the credits assignable to a car dealer or finance company effectively turning the credit into a point of sale incentive. In 2021, this credit falls to $2,500 and then again to $2,000 in 2022, before phasing out entirely at the end of 2025. Credits are also available for medium- and heavy-duty trucks. Colorado also offers $2,000 for a leased electric vehicle in calendar year 2020 and $1,500 between 2021 and 2025.

Last Reviewed: September 2020

Connecticut’s Hydrogen and Electric Automobile Purchase Rebate Program provides as much as $5,000 towards the incremental cost of the purchase of a hydrogen fuel cell electric (FCEV), battery electric vehicle (BEV), or plug-in hybrid electric vehicle (PHEV). Rebates are calculated based on the U.S. EPA rated electric range of the vehicle. Fuel cell electric vehicles earns $5,000, BEVs with an EPA rated electric range of 200 miles or greater are eligible for a rebate of $2,000. For BEVs with an electric range of 129-199 miles and/or PHEVs with a rated range of 45 miles or greater they qualify for a rebate of $1,000 while BEVs with electric ranges under 120 miles and PHEVs with an electric range under 45 miles are eligible for a rebate of $500. Incentive levels are periodically reviewed and updated based on market conditions.

Last Reviewed: July 2019

The Department of Natural Resources and Environmental Control, Division of Climate, Coastal & Energy offers monetary incentives for alternative fuel vehicles. The Delaware Clean Vehicle Rebate Program offers rebates to Delaware residents and businesses for the purchase of new alternative fuel vehicles such as battery electric and plug-in hybrid electric passenger vehicles. The program offers rebates of up to $2,500 for new battery electric passenger vehicles with a purchase price not exceeding $60,000. To compliment the vehicle program, rebates of up to $7,000 are also available to help fund electric vehicle charging stations for commercial public access, workplace, multifamily dwellings, and fleet. Additionally, through the Clean Vehicle Rebate Program, the Department also offers rebates of $20,000 for new qualifying heavy duty CNG class 7 or 8 vehicles (GVW >26,000 pounds). Altogether, there is $2,000,000 available in funding for clean vehicle and infrastructure rebates during the 2020 funding round which is set to expire on December 31, 2020, but is expected to be renewed for additional funding.

Last Reviewed: July 2020

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.

The DOEE is working to produce a Transportation Electrification Roadmap (Roadmap), required by Title V of the Clean Energy DC
Omnibus Amendment Act of 2018 (CEDC Act). This Roadmap will build on the District's overarching goal of becoming carbon neutral by 2050, and incorporate more specific transportation goals identified in the Clean Energy DC Plan (CEDC Plan), moveDC Plan, and
Sustainable DC 2.0 Plan. While the District cannot directly influence the kind of cars people buy, it can help to increase the use of electric vehicles in carsharing, public transit fleets, and private sector fleets. Because of the slow turnover of private vehicles, if actions to promote electric vehicles are not initiated soon, it will be much harder for the District to achieve its goal of achieving carbon neutrality by 2050. 

Last Reviewed: June 2020

No policy in place or proposed.

Last Reviewed: June 2020

A tax credit is available to businesses that manufacture energy products for use in battery, biofuel, and electric vehicle enterprises, for up to five years.

Last Reviewed: July 2019

No policy in place or proposed.

Last Reviewed: July 2019

No policy in place or proposed.

Last Reviewed: July 2020

No program in place or proposed.

Last Reviewed: July 2019

No policy in place or proposed.

Last Reviewed: July 2019

No policy in place or proposed.

Last Reviewed: July 2019

No policy in place or proposed.

Last Reviewed: July 2019

No policy in place or proposed.

Last Reviewed: July 2019

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 Reviewed: July 2019

The Efficiency Maine Trust (EMT) offers rebates on electric vehicles and public EV charging stations as a result of allocating $8.2 million of Volkswagen (VW) settlement funds to these objectives (Link).

Last Revised: June 2020

For fiscal year 2019 (July 1, 2018-June 30, 2019) and fiscal year 2020 (July 1, 2019-June 30, 2020), purchasers of qualifying all-electric and plug-in hybrid-electric light-duty vehicles could claim up to $3,000 against the vehicle excise tax in the state of Maryland, depending on the battery weight of the vehicle up to an annual cap.   This program was capped at $6M in FY20, no funds currently remain available for this program.

In addition, the Maryland Energy Administration also offered incentives for electric vehicle supply equipment totaling $1.2M in both FY19 and FY20.

Last Reviewed: June 2020

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

The Clean Energy and Climate Plan targets 300,000 zero emission vehicles by 2025 as the state's contribution to the Multi-State ZEV Action Plan. 

Last Reviewed: June 2020

No policy in place or proposed. However, Executive Directive 2020-01 created the Office of Future Mobility and Electrification in 2020, with a mission of enhancing Michigan’s mobility ecosystem, including developing dynamic mobility and electrification policies and supporting the startup and scale up of emerging technologies and businesses. Among the office's objectives is supporting the transition from internal combustion engine vehicles to EVs and expanding access to charging infrastructure.

Last Reviewed: June 2020

Minnesota Department of Transportation offers $250 in tolling credits for BEVs using their MnPass managed lane system.

Last Reviewed: July 2020

No policy in place or proposed.

Last Reviewed: July 2019

No policy in place or proposed.

Last Reviewed: July 2019

No policy in place or proposed.

Last Reviewed: June 2020

No policy in place or proposed.

Last Reviewed: June 2020

No policy in place or proposed.

Last Reviewed: May 2020

New Hampshire offered incentives for electric vehicle charging infrastructure in fiscal years 2015 and 2016.  No particular incentives for vehicles are in place or proposed.

Under NH's Diesel Emission Reduction Act (DERA) funded State Clean Diesel Grant Program funds are awarded for the replacement of older diesel vehicles, engines and equipment, which is generally far less efficient than the replacement vehicles. The older vehicles/equipment are destroyed. 

Last Reviewed: May 2020

All zero emission vehicles (ZEV) in the state of New Jersey are exempt from state sales and use taxes. Several incentives for purchasing electric vehicles are in place: Consumers will receive up to $5,000 when they buy or lease an all-electric or plug-in hybrid vehicle with an MSRP below $55,000 in New Jersey. The point-of-sale rebate will equal $25.00 per mile of electric-only range, up to the $5,000 per vehicle maximum. The Post-Purchase Incentive was opened on May 27, 2020. In addition, a 10-year NJ BPU incentive program will provide up to $500 per person for the purchase and installation of home charging equipment.

Last Reviewed: June 2020

No policy in place or proposed.

Last Reviewed: July 2019

Pursuant to legislation passed in April 2016, NYSERDA developed the Drive Clean Rebate, a rebate program for zero emission vehicles that launched in March 2017. Rebates of up to $2,000 per vehicle are available for battery electric vehicles, plug-in hybrid electric vehicles, and fuel cell vehicles. New York also started the New York Truck Voucher Incentive Program in 2013. Vouchers of up to $385,000 are available for the purchase of all-electric, plug-in hybrid, hybrid, CNG, propane, and fuel cell class 3-8 trucks and buses (incentive levels vary by vehicle size, fuel type, and incremental cost).  The program was relaunched in 2019 supported by a combination of funding from the Federal Highway Administration Congestion Mitigation and Air Quality Program and New York State VW Settlement Appendix D Funds.

Last Reviewed: November 2020

No policy in place or proposed.

Last Reviewed: July 2020

No policy in place or proposed.

Last Reviewed: July 2019

No policy in place or proposed.

Last Reviewed: July 2019

No policy in place or proposed, however a tax credit is available for up to 45% of the cost of installing commercial alternative fueling infrastructure (eligible fuels include natural gas, propane, and electricity). Source: Alternative Fuels Data Center.

Last Reviewed: August 2021

In the 2017 Legislative session, Oregon passed HB 2017, the "Keep Oregon Moving" Act, a large transportation bill that included incentives for ZEVs. Beginning January 1, 2018, EV purchasers in Oregon may submit an application under the Oregon DEQ EV Rebate and the Charge Ahead Rebate Programs. The EV Rebate Program offers rebates up to $2,500 for purchase or lease of vehicles with 10 kWh of battery or more and cost of less than $50,000. The Charge Ahead Program will be designed for applicants who are low to moderate income residents and can be used for new or used vehicles. If new, then the Charge Ahead applicant is eligible for both programs for a total of $5,000. DEQ is in process of rule-making. Funding for program is generated from a tax imposed on car dealers for “the privilege of engaging in the business of selling taxable motor vehicles at retail in this state.” A pending lawsuit over this funding mechanism is currently before the Oregon Supreme Court for consideration. If funding from this tax is determined to be ineligible to pay rebates, then no rebates will be provided unless the legislature approves a new funding source.

Last Reviewed: July 2019

The Alternative Fuels Incentive Grant (AFIG) Program provides rebates for Alternative Fuel Vehicles. 

Last Reviewed: July 2019

The ChargeUp! program offers incentives up to $15,000 for EV purchase or lease for models manufactured on or after July 1, 2016, though this program is currently fully subscribed and not currently taking new applications. National Grid is also offering up to a $5,000 rebate on the purchase of the Nissan Leaf to any of it's customers, which is almost the entirety of the State (https://www.nationalgridus.com/RI-Home/Ways-to-Save/Electric-Vehicles). 

Last Reviewed: June 2020

No policy in place or proposed.

Last Reviewed: July 2019

No policy in place or proposed.

Last Reviewed: July 2019

No policy in place or proposed. However, some local jurisdictions offer incentives:

  • The Davidson County Clerk offers a “green permit” for low emission vehicles, which allows free parking at metered parking spaces within the Downtown Nashville Central Business Improvement District (Link).
  • Knoxville Utilities Board residential customers are eligible to receive a rebate for the purchase and installation of Level 2 electric vehicle supply equipment. The rebate will cover 100% of the costs, up to $400 (Link).

Last Reviewed: July 2020

The Texas Emissions Reduction Program, which promotes clean air, includes a $2,500 rebate for electric-car buyers, who are also eligible for a $7,500 federal tax credit. Governor Abbott signed the program into law on June 12th and the rebate goes into effect on Sept. 1, 2017.

Last Reviewed: May 2020

Until December 2020, taxpayers are eligible for tax credits for the purchase of qualifying electric heavy-duty vehicles. Vehicles purchased in 2018 are eligible for a $20,000 tax credit. The tax credit amount is gradually reduced from $25,000 to $15,000 by 2020. There are also tax credits available for qualifying clean fuel vehicles purchased prior to 2016.

Utah has two Vehicle Repair and Replacement Programs(VRRAP),  one for the Cache valley  area (Cache County, UT and Franklin, ID) and the other is for the Northern Wasatch Front area (Box Elder, Davis, Tooele, Salt Lake, and Weber Counties). Through the VRRAP, low-income individuals that live, work, or go to school in an eligible county that have a vehicle that would fail an emissions inspection will be offered financial assistance to either repair the vehicle or replace it with a newer, cleaner one. The Cache Valley and Northern Wasatch Front programs offer $5,000 and $5,500 respectively for vehicle replacements and both offer $1,000 for repair costs. Both are funded by the Department of Air Quality through a federal Targeted Airshed Grant and are administered by the Bear River Health Department.

Last Reviewed: June 2020

Financial incentives are available for the purchase or lease of electric vehicles (including BEV and PHEV). These include electric utility incentives and a state incentive program for low- and moderate-income residents acquiring new and used plug-in electric vehicles. Separately, a state incentive program reduces the cost for low income Vermonters purchasing used, high efficiency (≥40 MPG) internal combustion vehicles.

Last Reviewed: June 2020

Virginia has established an additional fee for high efficient vehicles beginning July 1, 2020.  Vehicles which achieve more than 25 miles per gallon will pay a fee.  25 mpg vehicles pay no fee, but vehicles will pay additional fee to recover federal and state tax and assuming efficient vehicles weigh between 6,000 and 10,000 pounds.  Motorcycles, mopeds and vehicles exceeding 10,000 pounds are excluded from this fee.  This fee is variable and more efficient vehicles will pay a higher fee.  dmv.virginia.gov/vehicles/#HighwayUse_fee.asp

Last Reviewed: June 2020

Businesses are eligible to receive tax credits for purchasing new alternative fuel commercial vehicles and installing alternative fueling infrastructure.

Certain passenger, light-duty vehicles, and trucks qualify for a reduction in sales and use tax if they use electricity or hydrogen and are under a certain price cap. Buses, including transit and school, that are zero emission have their sales and use tax waived as well as for the associated charging and refueling infrastructure

Last Reviewed: June 2020

No policy in place or proposed.

Last Reviewed: July 2019

No policy in place or proposed.

Last Reviewed: July 2019

No policy in place or proposed.

Last Reviewed: July 2019