Some California Residents Can Save $13,000 on the Purchase of an EV
August 24, 2012 9:14 AM
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Some residents qualify for a local rebate of $3,000
The state pushing the hardest to transition drivers from gasoline-powered vehicles to electric vehicles and hybrids is California. Part of the state’s push to get people to adopt electric vehicles has come by way of tax credits and rebates (which are in addition to rebates available at the federal level).
All of those rebates can be combined making for a significant discount off the purchase price of an electric vehicle. The state of California offers a $2,500 rebate on the purchase of an electric car. The federal tax credit for buying an electric vehicle is $7,500. However, the San Joaquin Valley Air Pollution Control District recently announced that it is offering drivers in the district another $3,000 to purchase an electric vehicle.
When combined the local, state, and federal tax rebates, this represents a total of $13,000 off the price of an EV. To compare, in the state a new gasoline-powered Toyota Corolla has a sticker price of just under $18,000. By comparison, the
electric Mitsubishi iMiEV
has a sticker price of $29,975. That is a huge difference between factory MSRPs for the vehicles, but when you knock off the $13,000 in credits, the purchase price of the Mitsubishi EV is a more palatable $16,975.
Despite the significant discount, most drivers still stay away from electric vehicles. The biggest reason is range anxiety and long charging times. However, electric vehicles can be cheaper to operate. An example would be to drive the gasoline-powered Corolla mentioned before with a travel distance of 40 miles a day with gasoline at $3.95 per gallon would cost the driver $150 a month. Charging the electric car to drive the same distance each day would cost about $50.
President Obama is also seeking to
expand tax credits
for EVs by bumping the federal credit from $7,500 to $10,000, making the price gap even less if approved.
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Facts and Math are Wrong
8/27/2012 6:31:16 PM
The writer ignores that no tax credits or rebates avoid having to get a loan, and in the case the author presented, for a more expensive car.
I took an average of the best auto loan rates for California I could find - my average was 3.53%. If financed for 48 months, the true total cost for the EV Mitsubishi will be $32,185, and $19,327 for the "gas guzzling" Corolla. Those numbers mean monthly payments of $670 vs $402. For 48 months, thats $12,480 (260 * 48).
Ah, but "energy costs" are supposed to (supposed to) save the buyer $100 a month. So, if we consider that, then the higher monthly cost will be $160 for the EV car ($260 - $100). Over the 48 month life of the loan, that leaves $7,680 in extra costs that the "energy savings" won't pay for.
And the rebates? They are not taken until the car is owned for 36 months. And the rebates? The Mitsubishi does not qualify for the maximum either for the California rebate or the Jaoquin Valley rebate. It only gets $2,000 for either, instead of $2,500 for the former and $3,000 for the later. So after making $7,680 more in monthly payments for three years, the buyer will get just $4,000 back in rebates. That's $3,380 they won't get back in rebates by the end of the 48 month loan.
Ah, but if they get 100% of the $7,500 tax credit in their pocket as a income tax refund (not likely for every case) they can "save it" (also not likely) to pay last 12 months extra loan costs amd finally realize a $4,120 "savings" (on paper), it will take 48 months to realize. And then what? Will they keep car? No likely.
So for 48 months they have $160 a month extra costs, for the privelege of owning an EV vehicle; a typical Liberal action; doing it because it makes one "feel good", about themselves, not that it is really rational and not that it realistically solves any problem.
"Spreading the rumors, it's very easy because the people who write about Apple want that story, and you can claim its credible because you spoke to someone at Apple." -- Investment guru Jim Cramer
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