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 2018

No policy in place or proposed.

Last Updated: July 2017

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 2017

No policy in place or proposed.

Last Updated: July 2017

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 vehicle. Vouchers for up to $117,000 are available, depending on vehicle specifications, and are paid directly to fleets that purchase hybrid 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.

Last Updated: July 2018

Colorado offers a flat $5,000 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 2020, this credit falls to $4,000 and then again to $2,500 in 2021. Credits are also available for medium- and heavy-duty trucks. Colorado also offers $2,500 for a leased electric vehicle.

Last Updated: July 2018

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 175 miles or greater are eligible for a rebate of $3,000.  For BEVs with an electric range of 100-174 miles and/or PHEVs with a rated range of 40 miles or greater they qualify for a rebate of $2,000 while BEVs with electric ranges under 100 miles and PHEVs under 40 miles are eligible for a rebate of $500.

Last Updated: July 2018

The Delaware Clean Vehicle Rebate Program offers rebates for alternative fuel vehicles. The rebate amount ranges between $1,000 and $3,500 depending on the type of vehicle: plug-in, battery electric, propane, or natural gas. The total budget of the program is $2,500,000. Only residents and organizations from the state of Delaware are eligible to participate in the program. This program is set to expire on December 31, 2019. To complement the vehicle program, rebates of up to $5,000 are also available for electric vehicle charging stations at residential and commercial properties, as well as at workplaces.

Last Updated: July 2018

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 2018

No policy in place or proposed.

Last Updated: July 2018

An income tax credit is available to individuals who purchase new commercial medium- or heavy-duty vehicles that run on alternative fuels including electricity. Medium-duty vehicles qualify for a credit up to $12,000, while heavy-duty vehicles can earn a credit of up to $20,000.

Last Updated: July 2018

No policy in place or proposed.

Last Updated: July 2017

No policy in place or proposed.

Last Updated: July 2018

No program in place or proposed.

Last Updated: July 2017

No policy in place or proposed.

Last Updated: July 2017

No policy in place or proposed.

Last Updated: July 2018

No policy in place or proposed.

Last Updated: July 2017

No policy in place or proposed.

Last Updated: July 2018

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 2018

No policy in place or proposed.

Last Updated: July 2018

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 2017

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

Last Updated: July 2018

No policy in place or proposed.

Last Updated: July 2017

No policy in place or proposed.

Last Updated: July 2018

No policy in place or proposed.

Last Updated: July 2017

No policy in place or proposed.

Last Updated: July 2018

No policy in place or proposed.

Last Updated: July 2018

No policy in place or proposed.

Last Updated: July 2017

No policy in place or proposed.

Last Updated: August 2018

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

Last Updated: October 2018

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

Last Updated: July 2018

No policy in place or proposed.

Last Updated: July 2017

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 $150,000 are available for the purchase of CNG, hybrid, and all-electric class 2-8 trucks.

Last Updated: July 2018

No policy in place or proposed.

Last Updated: July 2018

No policy in place or proposed.

Last Updated: July 2017

No policy in place or proposed.

Last Updated: July 2017

No policy in place or proposed

Last Updated: July 2018

In the 2017 Legislative session, Oregon passed HB 2017, 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 Updated: July 2018

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

Last Updated: July 2018

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

Last Updated: July 2018

No policy in place or proposed.

Last Updated: July 2017

No policy in place or proposed.

Last Updated: July 2017

No policy in place or proposed.

Last Updated: July 2018

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 Updated: July 2017

Until December 2020, taxpayers are eligible for a 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.

Last Updated: July 2018

No policy in place or proposed.

Last Updated: July 2017 

No policy in place or proposed.

Last Updated: July 2018

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

Last Updated: July 2018

No policy in place or proposed.

Last Updated: July 2018

No policy in place or proposed.

Last Updated: July 2017

No policy in place or proposed.

Last Updated: July 2017