In the New York — California Climate Policy Competition, The Golden State Leads on EVs
Breakdown of the Numbers: Rebates, Incentives, and Charging Infrastructure
Why is CA currently ahead of NY on EVs? It comes down to rebates.
There is no question that electric vehicles are the future of transportation. Bloomberg New Energy Finance’s Electric Vehicle Outlook projects the impact of mobility electrification over the next twenty years and paints an exciting picture of declining road emissions. Currently electric vehicles represent 2.7% of new car sales, but Bloomberg estimates this number to rise to 28% by 2030, and 58% by 2040. Businesses could help make significant strides in transforming transportation by electrifying their fleets, but policies and incentives for businesses are still too arcane in many states, including New York.
State and federal governments play a pivotal role in driving the shift to clean vehicles as they can enact legislation that enables or incentivizes businesses to switch to sustainable assets more affordably. Considering the high contribution of vehicular emissions toward overall pollution and the heavy reliance of the American economy on car-based supply chains, a lot of legislation focuses on the conversion of business fleets to electric vehicles.
Making the Switch — Why EVs matter
In 2018, transportation was the largest contributor to U.S. greenhouse gas emissions (28%) in the U.S., and within that pie “medium and heavy-duty trucks” travelled 323 million miles and accounted for 23% of vehicle emissions. And while the incentives to switch to electric vehicles are straightforward for individuals, businesses face more barriers and complex requirements in certain states, or receive very little help from policymakers at all. You or I can obtain a tax rebate in many states of thousands of dollars for purchasing or leasing an electric vehicle. With federal tax credits of up to $7,500 eligible for redemption as well, there is a compelling case to switch to EVs for the typical consumer.
Incentives for Fleets — CA leads NY
The incentives for businesses to switch their fleets to electric vehicles are publicly available for download by state on the Alternative Fuels Data Center website (AFDC). The data shows which states are offering the most incentive programs to their businesses, and the results are striking. California has enacted the most (thirty-six) incentive programs for businesses that want to switch their fleets to cleaner vehicles. These incentives include regulations such as the “electric vehicle supply equipment rebate”, “heavy-duty truck emission reduction grant”, and the “alternative fuel and advanced vehicle rebate”. Nearly all of our nation’s states have one or more active incentive program for businesses looking to make the sustainable switch, but the sad truth is that in many states the regulations are unnecessarily complex or not as proactive as they could be.
New York is a state well known for commitments to clean energy, yet its EV incentives do not make it cheap for business owners to transition away from polluting fleets.
The NY Truck Voucher Incentive program “provides vouchers, or discounts, to fleets across New York State that purchase or lease all-electric…vehicles and scrap a similar older diesel vehicle that is part of their fleet.” What the bolded section implies is that the business cannot resell the conventional vehicles they are replacing, but they must scrap them for minimal value. While the program sounds great on paper, for many businesses it is not practical or financially viable to take on such a loss while making their fleets more environmentally friendly.
Contrast this with California where the Clean Vehicle Rebate Project allows “Businesses [and] nonprofits… [to be] eligible for one rebate… for up to $4,500 per vehicle.” The difference is stark; California allows it’s businesses to buy electric vehicles at a discount and gradually phase out diesel models, while New York makes businesses choose between obtaining no rebate for the purchase of an electric vehicle, or eating a big loss on the potential resale value of their diesel fleets.
Comparing the numbers on how successful these programs are can be difficult, as not all of the data for every incentive program is available. Some of the available data combines business rebates with rebates for individual consumers, but here are the broad strokes: between 2013 and 2018 the New York Truck Voucher Incentive Program issued vouchers totaling $14.5 million, while the New York State Drive Clean Rebate (focused on light-duty vehicles) has spent $42.7 million since its inception in 2017 (this combines individuals with businesses).
Since 2010, California’s Clean Vehicle Rebate Project has resulted in over $26 million in rebates for businesses, and individuals have redeemed $862 million as well. While California leads by a wide margin in consumer redemptions, New York is quickly making up ground on business fleets.
“If You Build It, They Will Come” — NY’s Focus is on EV Charging
This September’s report by the California Energy Commission raised the concern that EV purchases are outpacing the infrastructure investments that will support their adoption. California already has approximately 22,000 charging stations for its 655,000 EVs, but research has showed that roughly “one charging station [is needed] for every five or so EVs on the road.” California is looking to make up the difference by spending another $384 million on charging infrastructure over the next three years. In New York, Governor Cuomo has recently announced the “Make Ready” program that will spend over $700 million on EV infrastructure and incentives to help ready the State for its clean vehicle transition. Currently New York has about 1,920 charging stations, but we can expect this number to increase to more than 50,000 by 2025.
The Make Ready program is allocating $200 million of its budget to ensure equitable access for lower-socio-economic communities and is also incentivizing private investment in publicly available charging stations. $85 million will be managed by NYSERDA in a “climate competition” focused on addressing emissions, equity, and electrification in locations near heavily trafficked intersections and highways. Just this week, Governor Cuomo announced $11 million in Volkswagen settlement funds to go toward a buildout of fast chargers in upstate New York, with particular focus on disadvantaged communities. The momentum is clearly there, and the creativity and rigor of this plan may eventually make New York the nation’s leader in charging stations.
The Path to Nationwide Adoption of EVs
California and New York are the recognized leaders when it comes to decarbonization goals. Unfortunately, many states are simply not incentivizing their businesses to transition away from polluting processes. The AFDC map shows that states like South Dakota, Ohio, Arkansas, Hawaii, Alabama and Tennessee (the list goes on) all have fewer than 20 laws/regulations/incentives for decarbonizing transportation, while states such as California (a staggering 138), Washington, Colorado, and New York have more than 30.
Making our business fleets electric is one of the obvious steps we need to take as a country to lessen our environmental impact, and states have a golden opportunity to boost the energy transition by decarbonizing their roads. My hope is that states recognize this potential and follow California and New York’s model to help propel their businesses towards cleaner fleets.
At Build Edison, we have decades of experience in developing, managing, and financing demonstration projects across various clean energy technologies. We offer a number of solutions for startups, large companies, governments and investors to grow quickly and consistently, and to capitalize on one of the most exciting areas of the energy market.
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