The state of California is introducing new rebates on electric cars to encourage low income earners to switch to alternative fuels while at the same time taking rebates from the rich.
The initiative has been backed by the California Air Resources Board, which has permitted grants worth 373-million for the alternative fuel campaign. The grants will be used to fund initiatives that will make fuel-cell and electric cars affordable by low income earners. High income earners will not benefit from the rebates.
The California rebates will serve as discounts thus giving lower income earners access to alternative fuel vehicles that would otherwise be out of their reach. According to an executive summary report issued by CARB, the income eligibility limit will provide the much-needed support towards the growth of the Zero Emission Vehicle industry. The electric vehicles that are currently increasing their presence in the vehicle industry include vehicles from Tesla Motors Inc (NASDAQ:TSLA). Unfortunately Tesla vehicles are beyond the reach of many people due to their heavy price tags.
Over the past few months, other companies have brought on more competition to rival Tesla’s dominance. Toyota Motor Corp (ADR) (NYSE:TM) recently revealed a new fuel cell model called the Mirai. The vehicle supposedly performs better than Tesla’s flagship model in terms of power and mirage. The price tag is considerably lower too. The competition is good especially for consumers because prices are bound to decrease. However the decrease is not significant enough to boost accessibility to lower income earners.
According to the CARB 2015-2016 Funding Plan, individuals with incomes that are all below 300% of the federal poverty levels, the new rebates will be as follows. $3,000 for Plug-In Hybrid Electric Vehicles from the previous $1,500 and $4,000 for Battery Electric Vehicles from the initial $2,500. An annual income of $35,310 is at 300% the federal poverty rate. Anything less than that is below the rate. For a family of three, the cutline income is 60,270.
DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of USmarketsDaily.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: