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Tesla opposes reduced California electric car rebate

Government incentives have been a boon to the adoption of electric cars, which begs the question of whether they could survive without them.

Tesla Motors apparently doesn’t want to find out. The Californian carmaker is lobbying against proposed changes to the California Air Resources Board’s (CARB) program of electric-car incentives, which would effectively end state-level incentives for its so-far popular Model S sedan.

The plan would remove cars costing more than $60,000 from the program and incentives themselves would be reduced significantly, Capitol Weekly reports. CARB officials reportedly proposed this in part due to tight funding, but also in the hope that more of the incentive money will go to disadvantaged communities.

However, Tesla says the change could jeopardize 2,500 annual Model S sales in California leading to a production slowdown. The program issued about $100 million in tax rebates for new electric car purchases through January 2014, representing a 160 percent year-increase between 2012 and 2013.

However, the funding for these incentives has run out. CARB previously estimated that it would need $25 million extra just to cover new rebate applications between now and June 30, the end of California’s fiscal year. Consequently, CARB is considering the $60,000 price cap as well as significantly reducing the rebate for zero-emission vehicles from the current $2,500 to $500.

The only two vehicles likely to be affected by the price cap are the Model S – which has a base price of around $69,000 – and the 2014 Cadillac ELR, which starts at $75,995. Any changes to the California program would not affect the $7,500 Federal tax credit available for electric-car buyers, or any local incentives.

This is the second time in a week that Tesla has found itself at odds with California officials.


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